Bank of America Merrill Lynch strategists in client note
EUR/USD forecasts:
- 1.12 in Q3
- 1.14 in Q4 (previously at 1.20)
Citing:
- trade tensions have obscured "relatively solid U.S. macro outlook" for both the near-term and medium-term
- trade uncertainty is more negative for eurozone economy
- U.S. benefits from "massive fiscal stimulus"
- stronger U.S. growth will keep Fed on a hiking cycle supporting USD
- U.S. corporate repatriation from overseas could also be a driver
Looking for a moderate reversal in USD strength in 2019
Trade tensions more of a chronic risk factor than a core feature of macro outlook
ps Forecast for USD/CAD to high of 1.40 by year-end
BoA remarks via Bloomberg
