FXStreet (Bali) - At current levels of 1.33-1.34, when compared to its underlying drivers, EUR/USD looks to be around fair value, notes FX Strategists at JP Morgan.
"At current levels of 1.33-1.34, EUR/USD looks to around fair value versus its underlying drivers like short-end rate spreads, peripheral spreads and equity volatility."
"Risks are balanced into year-end. Downside (below 1.30 this year) requires a more substantial rise in US 2-yr yields beyond JPM’s target of 0.9%, but the Fed would need to pull forward its guidance to trigger that large a move."
"A much higher EUR/USD (beyond 1.36) would require a softer US economy or decline in US inflation, which also seem like low-odds events."