Near-term, Deutsche Bank thinks that the recent pause in USD/ EUR decline might prolong into year-end with market placing quite prolonged, genuine yield fair value still in the high 1.20 s, & ECB assumptions running in advance of just what was supplied at its December meeting last Thursday.

Going out to next year, DB sees even more downside to the currency with the dangers being skewed to greater, rather than minimal weak point. DB details 3 factors behind this view:

1st, ECB QE remains our standard most likely supplied in January. The intended results are likely to be larger & more protracted compared to equivalently-sized policies in the United States or Japan as a result of the visibility of negative rates.

2nd, we anticipate Fed price lift-off to materialize over the course of H2, with the buck traditionally showing a sturdy valuing trend into the initial central bank rate trek.

Finally, we believe next year will certainly mark the start of broader funding circulation shifts into the US fuelled by persistent development and also increasing financial policy divergence.

According to this sight, DB targets USD/ EUR in 2015 at 1.22 for Q1, 1.20 for Q2, 1.18 for Q3, and 1.15 for Q4.