- EUR/USD tumbles as investors take profits on bets against TRY.

- But 1.16-to-1.20 range to dominate into 2021, Rabobank forecasts

- Virus shutdowns, vaccine logistics, ECB outlook all limit EUR upside.

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EUR/USD spot rate at time of writing: 1.1769Bank transfer rate (indicative guide): 1.1358-11440FX specialist providers (indicative guide): 1.1593-1.1664More information on FX specialist rates hereThe Euro-Dollar rate was nursing losses on Thursday and could spend the months ahead confined to a narrow range, according to new and upgraded forecasts from Rabobank, as concerns about the economy, European Central Bank (ECB) policy and vaccine logistics keep it from new highs.

Europe's single currency was softer after having tumbled against a vast majority of its rivals including Pound Sterling in the prior session, with some newswires reporting losses alongside remarks from ECB President Christine Lagarde.

Lagarde reiterated to the online ECB Forum on Central Banking that Frankfurt will likely increase its quantitative easing programme and provide more cheap cash to commercial lenders following the bank's December meeting.

"The ECB Chief economist made it clear that he was concerned about the summer’s rise in the value of the EUR and the rally in EUR/USD stopped short at 1.20," says Jane Foley, a senior FX strategist at Rabobank. "We still see this area as marking strong psychological resistance for EUR/USD."

But the ECB's likely policy moves were already telegraphed in great detail at the October 29 meeting - a day that saw the Euro decline alongside stock markets - and the single currency's Wednesday losses were already well in train this week before Lagarde appeared on screen at 13:00 London time. The Euro was on the back foot since EUR/TRY began to slide, and may have declined as investors took profits on earlier wagers against the Turkish currency.

Above: Euro-to-Dollar rate at hourly intervals alongside EUR/TRY (blue line, left axis) and S&P 500 index futures (black line).

Turkey's Lira rose in response to perceived signs of a u-turn by President Recep Tayyip Erdogan, whose years-long tussle with the market may be nearing its end, but investors will not have been able to escape from some positions without first transacting in EUR/USD. In most cases and behind the scenes, dealing in EUR/TRY requires transactions in EUR/USD, which means nascent Euro declines may more likely be driven by the Lira rather than ECB.

But the Euro benefits from strong support around 1.16, which marks the floor of a range that forecasts from Rabobank see dominating into next year with new highs ruled out by risks to the economic outlook and ECB opposition to exchange rate strength.

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EUR/USD Forecasts Q2 2023 Period: Q2 2023 Onwards Details: Consensus institutional forecast targets + max & min targets. Contributors: Citi, Barclays, Morgan Stanley & more Provider: Global Reach Partners Type: Free Download Please Access Here

{wbamp-hide end}{wbamp-show start}{wbamp-show end}"[We] would expect the currency pair to trade mostly in the 1.20 to 1.16 range," Foley says. "While the fundamental backdrop may suggest less reason to buy the safe haven USD, the market is still long of the EURs and going into next month’s ECB meeting we expect that confidence in that position will be tested."

Europe's single currency dipped Wednesday even as other risk assets like commodities and stocks built on earlier gains made when Pfizer and its partners said on Monday that their coronavirus vaccine candidate had demonstrated high effectiveness in clinical trials. Vaccine progress provides alternatives to the so-called lockdown of people, companies and economies in the name of containing the coronavirus.

Vaccine progress bolstered the rally in risk assets that was ignited when last week's U.S. election appeared to show Democratic Party challenger Joe Biden beating President Donald Trump in the race for the White House but falling short of the support needed for a Congressional majority.

Above: Euro-to-Dollar rate at dai;y intervals alongside S&P 500 index futures (black line, left axis).

"A move out of USDs and into high yield currencies is likely to lend support to commodity sensitive currencies in the G10 space. Oil prices have risen notably since the start of the week," Foley writes in a Tuesday note to clients. "That said, since it will still be some time before a vaccine reaches large proportions of the global population, the news can not detract from the fact than many people, particularly in the US and Europe, are facing a difficult winter."

November newsflow has been positive for the Euro but Foley has warned that ongoing hurdles in the vaccine development process combined with a lack of production capacity, which risks creating supply bottlenecks, could mean it's months or even years yet before parts of the global population can hope to be vaccinated. This and other factors are seen keeping investors' enthusiasm for the Euro in check ahead of the December ECB meeting.

Investors widely expect a package of new measures aimed at supporting the Eurozone economy through its second so-called lockdown in December, although there's uncertainty over the fate of already-negative deposit rate.

"While there are still risks on the horizon, we have curtailed our expectations for another round of USD strength and revised up our 3 month EUR/USD forecast to 1.17 from 1.16 and our 6 mth forecast to 1.18 from 1.14," Foley says. "Positions have been pared back but given that Europe is suffering substantially from a second wave and is facing a double dip is economic output in Q4, we see upside potential from the EUR as being fairly limited particularly ahead of the December ECB meeting."

Above: Euro-to-Dollar rate at weekly intervals alongside U.S. Dollar Index (black line, left axis).