Forex Flash: EUR/USD downside set to continue long-term – UBS

FXstreet.com (Barcelona) - Investors remain in wait-and-see mode ahead of the eventual reopening of banks in Cyprus on Thursday. Meanwhile a familiar theme continues to play out quietly behind the scenes - US economic outperformance is gradually nudging the dollar incrementally higher.

US equities continue to benefit from the better tone of US dataflow and the S&P500 narrowly avoided closing at a record high on Tuesday. According to Research Analyst Gareth Berry at UBS, “Our European economists reinforced our stronger dollar view overnight by lowering their Eurozone growth forecast for 2013 to -0.4% (from +0.1%) previously. Our US economists meanwhile continue to look for 2.3% US growth over the same timescale. So whatever one's view on the outlook for the Eurozone sovereign debt crisis, it seems the trans-Atlantic growth gradient is reason enough to position for long-term EUR/USD downside.”