Investment bank Rabobank maintains its long-term optimism on the EUR/USD pair, forecasting growth to1.18 by spring 2027. However, Friday's events forced analysts to reconsider the short-term trajectory: Fed Chairman Kevin Warsh's speech in Jackson Hole dramatically changed the balance of power.
Friday reversal: bet against confidence
On Friday, markets received a strong signal from the US:
- Warsh's Rhetoric:The likelihood of a Fed rate hike in September soared from35% to 57.5%.
- Couple's reaction:The euro interrupted its August rally and fell by0,6%, having reached the mark1,158
Despite this fall, Rabobank does not believe that the fate of the euro now depends on Europe. The bank is confident that the pair's dynamics will be determined by news from the United States.
“Bessente put option”: the main threat to the dollar
Rabobank's argument is based on the growing conflict between the US Treasury (Scott Bessent) and the Federal Reserve System. After the announcement that the Treasury would double the volume of bond repurchases, the market started talking about creating the so-called"Bessente put option"— the minister’s readiness to artificially restrain the yield of long-term treasuries.
This creates a dangerous trap for the US currency:
- Political incentive:The administration wants low rates ahead of the midterm elections.
- Market risk:Artificially suppressing yields undermines confidence in the market's ability to signal inflation.
- Confidence in currency:Questions arise about the reliability of Treasuries, which brings back the discussion about the depreciation of the dollar.
Why does the ECB look more reliable than the Fed?
Against this background, the European regulator is winning the battle for reputation:
- Inflation:Despite the shock from the war in Iran (inflation 3.2%), expectations remain subdued.
- Actions:The market firmly believes That the eCB will follow Through. rabobank expects another rate hike in september.
- Economy:Eurozone GDP in the second quarter and PMI in August were better than expected, proving the region's resilience to the energy crisis.
However, its status as an energy importer prevents aggressive purchases of the euro while conflict in the Middle East continues.
Final forecast: corridor before the jump
Rabobank formulates a clear two-step strategy:
- Short term (next months):Fluctuations in the range1.16 – 1.17.
- Mid-term (by spring):Gradual growth to the goal1,18.
Пятничное укрепление доллара делает сценарий роста менее вероятным прямо сейчас. Если цены на повышение ставки ФРС продолжат расти, пара проведет больше времени ниже зоны 1,16–1,17. Но если вмешательство Казначейства снова обрушит доходности, доллар может быстро вернуться к падению, подтвердив долгосрочный прогноз банка.