EUR/USD likely to be at 0.95 by end-2016

European Central bank's rhetoric might at the December meeting might come at a long-term cost to EUR , while EUR/USD was forecasted higher last week.

"We continue to forecast EUR/USD at 0.95 by end-2016", says Barclays in a research note. 

The year 2016 looks prepared for higher volatility in EUR/USD. While the Greek crisis has abated, there is a new escalation of tensions around most of highly-indebted EA countries are still a key risk as there is mounting up opposition to rising immigration and fiscal austerity.

After the ECB meeting, the longer term inflation expectations in the market also dropped, with most recent flash estimate of HICP inflation disappointing significantly, which should be confirmed at 0.9% yoy, while previously it was at 1.1% yoy.

Currently EUR is trading at 1.0965 against US dollar.