UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang have recently provided their insights on the potential movements of the EUR/USD currency pair. According to them, the currency pair is expected to remain in its current consolidative range in the near future. This article will delve deeper into their predictions and analyze the factors that may affect the EUR/USD exchange rate.
Maintaining Consolidative Range:
The EUR/USD currency pair has been trading within a consolidative range of 1.1700 to 1.1950 for the past few weeks. According to UOB Group Economists, this range is likely to be maintained in the near future. The primary reason for this prediction is the current state of the global economy, which remains uncertain due to the ongoing COVID-19 pandemic.
In addition to the pandemic, other factors that may contribute to the stability of the EUR/USD exchange rate include the United States’ monetary policy and the European Central Bank’s stimulus measures. While the Federal Reserve has signaled its willingness to keep interest rates low for an extended period, the European Central Bank is expected to maintain its accommodative stance to support the region’s economic recovery.
Despite the current stability of the EUR/USD exchange rate, there are still potential risks that could affect its future movements. One of the main risks is the uncertainty surrounding the pandemic and the pace of the global economic recovery. The emergence of new COVID-19 variants and the effectiveness of vaccines in controlling their spread could have a significant impact on the global economy and, consequently, the EUR/USD exchange rate.
Additionally, geopolitical tensions, trade disputes, and other macroeconomic events could also affect the EUR/USD exchange rate in the coming weeks. As such, traders and investors should remain vigilant and closely monitor the latest news and developments that may affect the currency pair.
In conclusion, UOB Group Economists predict that the EUR/USD exchange rate will remain within its current consolidative range of 1.1700 to 1.1950 in the near future. While the current stability of the currency pair is reassuring, potential risks such as the ongoing pandemic and geopolitical tensions could affect its future movements. As such, traders and investors should remain vigilant and keep a close eye on the latest news and events that may impact the EUR/USD exchange rate.