EUR/USD: Close To Fair Value; What’s Next? – Barclays

Euro/dollar is relatively stable at a somewhat higher ground. Has it reached a new balance? Here is the view from Barclays:

Here is their view, courtesy of eFXnews:

Barclays Capital FX Strategy Research discusses its EUR/USD outlook going into 2018, expecting a flat profile around 1.17 level into Q1 of next year before breaking higher towards the 1.20 level in Q2.

“The EUR’s gains will likely remain supported by solid euro area growth, but much further gains are capped, as the currency is close to fair value.

Starting in Q2 18, we expect EUR appreciation to renew on the back of an announcement around sequencing of ECB tightening. The Italian election will likely result in a higher risk premium for the EUR in the near term, but we see the ‘Politics of Rage’ more as a medium-term risk for the euro area,” Barclays argues.

Barclays targets EUR/USD at 1.17, 1.19, and at 1.22 in Q1, Q2, and Q3 of 2018.

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