EUR/USD: will weaken to 1.05 through year-end - Scotiabank

Analysts at Scotiabank explained that the euro (EUR) will weaken versus the USD in response to rising U.S. yields and widening rate differentials.

Key Quotes:

"Spreads should continue to pressure EUR/USD lower towards our 1.05 target through year-end."

"We see no chance of the European Central Bank reducing stimulus before the planned end to the current asset purchase programme of EUR80bn/month in March 2017."

"Neither inflationary pressures nor inflation expectations have increased significantly since the ECB programme began. Actually, under these circumstances, an extension of quantitative easing, but incorporating a lower total of monthly asset purchases, seems more likely."