The next are Bank of America Merrill Lynch's atest comprehensive outlook for the EUR including its forecasts, as well as risks:
Forecasts: it's a affair of time.
We rest Euro bearish, expecting EURUSD at 1.31 yesteryear the cease of Q1 as well as 1.25 yesteryear the cease of 2014. However, nosotros come across around upside risks to our projection inwards the short-term, taking into concern human relationship how the Euro has traded as well as thence far inwards the year. For the Euro to weaken, nosotros remove to come across a slowing of equity flows, an ECB indicate for farther easing to address deflation risks and/or a to a greater extent than sustained improvement inwards US data. We believe that at to the lowest degree 2 of these developments volition induce got house inwards the outset one-half of the year, allowing the Euro to interruption out from its electrical flow range.
Risks: balanced risks:
Upside EUR risks include farther weakness inwards the US labor market, an growth of Eurozone inflation good higher upward 1%, as well as a conclusion yesteryear cardinal depository fiscal establishment reserve managers to growth their portion of Euros to pre-crisis levels. Downside Euro risks include a farther driblet inwards Eurozone inflation, which would trigger ECB unconventional policies inwards our view, as well as inflation inwards the US if labor forcefulness participation continues declining at a fast stride every bit the economic scheme recovers.
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