FXStreet (Guatemala) - Jane Foley, Senior Currency Strategist at Rabobank explained that the shockingly weak revised estimate of US Q1 GDP at -2.9% q/q saar has had the effect of boosting risk appetite.

Key Quotes:

“Investors have decided that the Fed may be even less inclined than before to start hiking the Fed’s fund rate. The implication is that the warm tide of cheap liquidity will continue to feed investor’s desire to load up on risky assets irrespective of the geopolitical and economic risks that persist”.

“However, until the Fed makes it clear that inflation pressures could be a concern, the USD is likely to remain floating in the doldrums. We expect EUR/USD to remain in the vicinity of 1.36 on a 1 to 3 mth view and end the year around 1.35”.

“On a 12 mth view we continue to forecast a move to 1.30 but this assumes confirmation of a strengthening in US growth and inflation data”.

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Forex pairs in this Article » EUR/USD

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