Antje Praefcke, FX Analyst at Commerzbank, expects the US Dollar to struggle against the Euro.

Levels in EUR/USD above 1.08 seem justified

“The market clearly remains more sceptical towards the US as opposed to the Euroze. That is why the Dollar has a more difficult standing against the Euro, as the Fed has become a little more cautious whereas the ECB has continued its rate cycle almost unaffected by the events of the past weeks and continues to sound restrictive. As a result, levels in EUR/USD above 1.08 seem justified.”

“Monetary policy remains the most important driver. That is why in my view focus will remain on the price data. On the other hand, I think that it is not (yet) going to be sufficiently surprising to provide much momentum. For that to happen market uncertainty would have to ease too. However, that also means that the Dollar is unlikely to be able to gain ground considerably for now.”