CIBC FX Strategy Research notes that its EUR/USD fair value model is estimated around 1.29 and expects to see the exchange rate reaching 1.17 by the year-end.
"Over that time, look for ECB hawks to keep pounding the table, and doves to have less reason to continue pumping stimulus into the system.
Furthermore, the Eurozone’s large trade surplus will provide a tailwind to the currency at a time when a deteriorating trade balance in the US is doing the exact opposite to the greenback," CIBC adds.
CIBC targets EUR/USD at 1.14, 1.16, and 1.17 by the end of Q2, Q3, and Q4 of 2017.
Source: CIBC Economics – CIBC Capital MarketsOriginal Article
