FXStreet reports that economists at Nordea argue that rates are still too low relative to the economic outlook, in particular in USD, but the European Central Bank clearly disagrees. Regarding the EUR/USD pair, a move to the 1.15-1.17 range is likely.

“USD interest rates will increase more (2% 10yr bond yield target for this summer), the ECB will face an uphill battle in terms of containing the spill-over to EUR rates, but will try their best, while EUR/USD is a clear sell-on-rallies towards levels around 1.15-1.17.”

“Should the Fed allow USD reflation to run even hotter, the USD is a buy. Should the Fed cause a tantrum, the USD is a buy and should risk assets drop due to higher real rates, the USD is a buy.”