Rabobank Forecasts EUR/USD Drop Toward 1.16 Amid Geopolitical Tensions

Key Facts

1The EUR/USD exchange rate fell to around 1.1603, extending losses seen earlier in the week.

2The US Dollar benefited from safe-haven demand linked to the escalating Middle East conflict.

3Rabobank forecasts that EUR/USD risks a further drop toward the 1.16 level.

The EUR/USD exchange rate has retreated to approximately 1.1603, extending a downward trend observed earlier this week. This decline is primarily driven by increased demand for the US Dollar as a safe-haven asset amid escalating geopolitical conflicts in the Middle East. Analysts at Rabobank have warned of further downside risks, suggesting the pair could target the 1.16 level in the near term. A significant shift in investor positioning, triggered by global tensions, has weighed heavily on the Euro following a technical breakdown below the 1.18 mark. Market participants are closely monitoring the US Dollar Index (DXY) as the greenback's bullish momentum continues to pressure the single currency.