The current EUR / USD consolidation phase should be broken down, according to the Rabobank FX team of analysts. Frictions between EU members amid economic consequences of COVID-19 blockages will weaken the euro against the USD refuge, according to experts.
“Market players can do little more than watch lawyers and politicians debate the implications of this month’s German court ruling on the proportionality of ECB asset purchases. Whatever the end result of this debate on ECB cases, the fact that there is a dispute is evidence of new friction within the EU. “
“Since the closings prolong unemployment queues and create the biggest economic shock at least since World War II, it is likely that if politicians are not careful, tensions will ignite in the region.
“In a context of solid demand for the USD, we see the possibility of a fall in the EUR / USD towards 1.05 on a 3-month view.”