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Forex pairs in this Article » EUR/USD
FXstreet.com (Córdoba) - Analysts at the Danske Bank expect the EUR/USD to reach 1.48 in three months and 1.46 in six months. According to them volatility will remain elevated "but also for underlying support to remain". The ECB monetary tightening over the coming months should offer support to the Euro and "combined with a high probability that the EU will agree on an additional financial aid should secure further euro upside".

Higher US yields are a risk to the forecast, pointed out analysts in its FX Forecast Update report. "Euroland bond yields have fallen since early April, but US yields have fallen more. This has led to a further widening of the EUR-USD rate spread and supported EUR/USD in an environment of waker risk sentiment. Economic data is expected to improve over the coming months, however, which could lead to a sharp rebound in US yields".

Danske Bank analyst's scenario is that Euroland rates will rise in tandem with US rates, "but the potential for a sharp spread narrowing is a key downside risk to our EUR/USD forecast."
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