FXStreet reports that economists at OCBC Bank forecast the EUR/USD to trend lower in the second half of the year as the European Central Bank (ECB) is set to remain more dovish compared to the Federal Reserve.

“Chatter about reopening positives leading to EZ macro outperformance have been building, and is often presented as a positive risk for the EUR. However, there appears to be limited upside momentum in terms of positive data surprises, especially relative to the US. Thus, remain fundamentally suspicious of EUR-positive arguments based on EZ macro outperformance.”

“Overall, expect the ECB balance sheet expansion to continue to outpace the Fed at this juncture. This belies our structural EUR-negative view in 2H 2021. Investment community long on the EUR, suggesting considerable scope for EUR declines should sentiment turn.”