EUR/USD is hovering around the 1.08 mark after yesterday's session, which was characterized by slightly weaker-than-expected March PMIs from the euro area and slightly stronger readings from the US , Danske Bank's FX analyst Jesper Fjärstedt reports.

EUR/USD to trade at 1.06 in 12 months from now

"Euro area PMIs came in softer, with the composite PMI rising to 50.4 (cons.: 50.7) from 50.2. The increase was driven by the manufacturing sector, where the PMI climbed more than expected to 48.7 (cons.: 48.2) from 47.6, while the services sector disappointed with a decline to 50.4 (cons: 51.1) from 50.6. In contrast, US PMIs showed the opposite trend."

"The manufacturing index fell back into contractionary territory, aligning with weaker signals from regional Fed indices (Empire, Philly Fed). However, the services index rebounded sharply to 54.3 (from 51.0), contributing to a modest rise in US yields and a stronger USD."

"Today, the focus shifts to Conference Board consumer confidence data, where US recession concerns have been reflected recently. In the near term, we believe a consolidation around current levels is likely for EUR/USD. Longer term, we raise the profile higher to 1.06 in 12M as the shift in risk asset allocation away from the US appears structural."

Source: Fxstreet