Forex Flash: EUR/USD year-end target at 1.27 – Scotiabank

The single currency is testing again levels beyond the key resistance of 1.3000 on Friday, partially recovering ground after bottoming in the area of 1.2950, levels last seen in early December.

After yesterday’s boost on euro-friendly comments by ECB’s Mario Draghi, Camilla Sutton, Chief Currency Strategist at Scotiabank commented, “…from the ECB’s point of view the economic recovery in the later part of 2013 is based on an increase in world demand (exports), loose monetary policy and less fragmentation. We would suggest that this recovery strategy requires a weak EUR”.

“Accordingly, we expect that any rise in EUR back towards its February level of 1.35 will generate angst at the ECB. We hold a year-end EUR forecast of 1.27”, concluded the expert