Citi Trims Euro Target as Hawkish Fed and Iran Tensions Weigh on the Currency

Deep News00:15

Citigroup currency strategists expect the euro to weaken against the US dollar, citing a more hawkish Federal Reserve and renewed tensions between the United States and Iran.

"With AI tailwinds, attractive real rates, and a rising euro-related risk premium, US capital flow dynamics remain supportive of the dollar," Citigroup's Daniel Tobon and Brian Levine said in a report.

The Citigroup strategists cut their three-month euro/US dollar forecast to 1.135 and lowered their six-to-twelve-month projection to 1.13.

The euro/US dollar pair fell as low as 1.1161 on Monday, as France's budget dispute and election turmoil led investors to assess the risks facing French bonds.

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