EUR/USD to drop to 1.10 in case of Fed hike in summer according to Rabobank.

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Jane Foley, senior strategist at Rabobank things that EUR/USD could decline to the 1.10 area if the Fed hikes rates this summer. “The minutes of the Fed’s April FOMC referred to three conditions for a rate hike in June. These are a pick-up in growth in Q2, upside progress in inflation and a continued strengthening in the labour market. Although the US April labour data disappointed, it can be argued that all three conditions are close to being fulfilled and we see a strong chance of the Fed raising rates this summer. As a result if the Fed does hike rates this summer, we expect EUR/USD to drop to the 1.10 level” written in the report.

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