Citigroup Predicts Unprecedented EUR/USD Surge Amid U.S. Dollar Weakness
The U.S. dollar is facing significant challenges, with Citigroup adjusting its forecast for the EUR/USD currency pair in response to the current volatility. The bank has raised its target for EUR/USD to a potentially unprecedented level, foreseeing a remarkable 19% increase in the four-month spot rate.As of 08:15 ET (12:15 GMT), EUR/USD was down 0.1% to $1.1410. Despite this dip, the pair has surged by more than 5% in April alone, and an impressive 10% this year. Citi analysts are now maintaining a long position on the pair, shifting their target from 1.15 to 1.20, with an additional 3-month target at 1.1850 and a knockout level at 1.23.
The bank's revised outlook highlights the risks of capital flight from the U.S., a trend that has been partially mitigated by the repatriation of funds. Investors in Europe have been reducing exposure to unhedged U.S. assets, marking a historical shift that supports adjustments in hedge strategies. If the current pace of EUR/USD movement continues, it could see a record-breaking surge.
This marks a pivotal moment for the EUR/USD, as it reaches levels unseen in recent times, with the potential for even more significant moves in the coming months.
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