📝 Revising Our EUR/USD Year-End Target to 1.20: ING Strategy

What seems clear from events over recent months is that US credit conditions are tightening and that this will weigh on US growth prospects. So far, the Federal Reserve has yet to formally quantify the impact of these developments, but our team forecasts that they are enough to curtail the tightening cycle and prompt 100bp of easing in the fourth quarter.

Our year-end targets for EUR/USD and USD/JPY now sit at 1.20 and 120, respectively. As we have argued in prior FX Talking publications, we expect the bulk of the dollar decline to occur in the second half of this year – a view premised on clear signs of US disinflation emerging and a successful resolution to the US debt ceiling stand-off. - ING Strategy