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14 Nov 2013
Flash: Look for EUR/USD towards 1.30 in the weeks ahead - Societe Generale
FXstreet.com (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that a week on from the ECB's decision to cut rates, the Euro has fallen 0.4% against the dollar, 0.1% against the pound, but is stronger against the rest of the European currencies, and the yen. 2-year swap rates are 6bp lower than they were a week ago, and 10-year Bund yields 2bp lower.
Key Quotes
“The message from the market is that the ECB must do more. The ECB's Head of Economics Peter Praet, has re-iterated on TV this morning that the debate within the Council was about the timing of the cut, not whether it was needed, and re-emphasised that the ECB still has a number of measures it can take if required.”
“Whether 'outright' QE is within the ECB's mandate, and whether Mr Draghi can persuade hs colleagues of the eed for it, is bound to be a focus in the months ahead. I still think that the ECB is at the start of a new phase of easing, which will last many months and will contrast with the Fed tip-toeing in the other direction.”
“On that basis, I expect further EUR/USD downside towards 1.30 in the weeks ahead. 1.35 held overnight and if it does so today that may signal that we have found a new post-ECB meeting top.”
Key Quotes
“The message from the market is that the ECB must do more. The ECB's Head of Economics Peter Praet, has re-iterated on TV this morning that the debate within the Council was about the timing of the cut, not whether it was needed, and re-emphasised that the ECB still has a number of measures it can take if required.”
“Whether 'outright' QE is within the ECB's mandate, and whether Mr Draghi can persuade hs colleagues of the eed for it, is bound to be a focus in the months ahead. I still think that the ECB is at the start of a new phase of easing, which will last many months and will contrast with the Fed tip-toeing in the other direction.”
“On that basis, I expect further EUR/USD downside towards 1.30 in the weeks ahead. 1.35 held overnight and if it does so today that may signal that we have found a new post-ECB meeting top.”