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EUR/USD: Euro could benefit if risk for China assets increases – Deutsche Bank

The Deutsche Bank analysts offer their fundamental outlook on the EUR/USD pair, citing that the downside looks limited should the dumping risks of China assets increase.

Key Quotes:

“Cyclical picture dim on multiple fronts: trade wars, Brexit and Italian risks.

Sees EUR/USD trying to break 1.10 over the summer though not far beyond.

Do not see extended fall for the EUR/USD, as:

European balance of payments continues to be "Japanized" with current account recycling decelerating further this year

Second, the Fed has greater potential to ease policy which should eventually be more negative for the dollar

Third, the euro is likely to benefit from an unwind of euro funding as well as pricing some "dumping" risk of China assets.“