One argument for a lower EUR/USD:
Relative rates: still in favour of USD...
...but several arguments for a higher EUR/USD:
Valuation : EUR/USD is substantially undervalued
External balances : The EU/US CA differential is at its widest level since 2004-06
Cyclicals : the Eurozone's business cycle looks stronger than the US cycle
Positioning : speculators are stretched short EUR/USD - impact of relative rates fading
Terms of trade : 'lower oil for longer' has become a EUR positive
Hedging flows : commercials FX hedging of EUR set to fall, which should support EUR/USD
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