Baku, Azerbaijan, Jan. 3
By Taleh Mursagulov - Trend:
Saxo Bank expects the EUR/USD currency pair to be between 1.1000 and 1.2000 in 2019, the bank told Trend Jan. 3.
Risks to the downside could be from a further sell-off in global equities as the US dollar is usually preferred as a safe haven, the bank said.
“Also, we expect 2019 to be a challenging year for EU politically, although the euro is already somewhat weak due to this factor,” the bank noted.
Commenting on Fed’s changing the discount rate in 2019, the bank said that the Fed is likely done hiking rates for the cycle and would likely respond to downside risks by first looking at slowing or stopping its quantitative tightening problem rather than cutting rates.
“To raise the rate, the US economy would have to show signs of accelerating inflation – we don’t see this risk in the near future, given the massive drop in oil prices and a relatively strong US dollar,” the bank added.
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