Danske Bank: EUR/USD will fall to 1.04 dollars, and then will rise to 1.12 dollars

In the next 1-3 months the decisive mood of Federal Reserve and the growing political risk in Europe will send EUR/USD to 1,04-1,05 dollars, analysts say.
In the longer term, analysts remain bullish in the pair and believe that the huge difference between the positive current account of the euro area and negative US will send EUR/USD to 1.12 dollars.
Historically, the biggest fiscal deficit in the US, which does not accompany rising interest rates in the country, is a bearish factor for the US currency, analysts say.
They say the Fed will likely to disturb from the strength of the dollar, which may interfere with the planned increase in interest rates. Bank analysts lowered their forecasts for EUR/USD and now they look like this:
- 1 month - 1.05 dollars;
- 3 months - 1.04 dollars;
- 6 months - 1.08 dollars
- 12 months - 1.12 dollars.