EUR/USD set to move downward over coming months – Rabobank

There have been a lot of developments in factors that have driven both USD strength and EUR weakness. Thus, economists at Rabobank are minded to push their outlook for the EUR/USD pair further down. 

Eurozone is likely to fall into recession this winter

“Not only do we see the EUR vulnerable to Eurozone recession risks, but we expect that the value of the USD is likely to remain elevated into 2023.”

“If the Nord Stream 1 natural gas pipeline is switched back on fully, in time next week after its scheduled maintenance, the EUR is likely to be granted a reprieve. However, politicians are fearing that the flow may be insufficient for Europe to fully strength their gas reserves ahead of the winter.”

“Natural gas flows will be instrument in guiding the outlook for the EUR in the months ahead. That said, even if the EUR is boosted, we expect USD strength to dominate into next year suggesting upside for EUR/USD could be limited even on good news regarding Nord Stream.”