Economists at Danske Bank discuss Fed policy outlook and its implications for their EUR/USD forecast.

Fed to maintain rates at the current level for the remainder of the year

We still think the bar for restarting hikes in July will be high unless inflation pressures clearly accelerate over summer, which we consider unlikely.

We make no changes to our forecasts and expect the Fed to maintain rates at the current level for the remainder of the year. 

A pause could pose near-term upside risks to EUR/USD, but we still maintain a bearish view on the cross towards H2.