Euro 1Q 2021 Forecast: Can the ECB Curb the Euro's Strength?
EUR price outlook for 1Q 2021
The ECB seems to have run out of ammunition in its battle to keep EUR/USD below the 1.20 level.
The clear break above 1.20 in December suggests the ECB is now unable to curb the Euro’s strength and that further gains are likely in the weeks ahead.
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Euro Price Gains Likely in 1Q
The European Central Bank has made clear that it does not want to see EUR/USD above the 1.20 mark, once seen as its “line in the sand” for the pair, because of the negative impact of a strong Euro on both the Eurozone’s competitive trade position and its inflation rate. Yet it is hard to see what it can actually do about it now the pair is above that level, and that suggests further strength in EUR/USD in the weeks ahead.