7 Jun 2013
Flash: EUR/USD holds neutral outlook – BTMU
FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts see that EUR/USD has a neutral outlook and looks set to range between 1.3000 and 1.3300.
They begin by commenting that the euro is expected to remain relatively stable against the US dollar in the week ahead with the pair having traded roughly within a narrow 1.28 to 1.32 range since mid February. Further, the euro is edging back towards the top of that range in the near-term reflecting some tentative evidence that the euro-zone economy may be beginning to stabilize, which was acknowledged by ECB President Draghi at today’s monetary policy press conference.
They add however, that the weak growth and inflation outlook still leaves the door open to further monetary easing ahead which will dampen euro upside potential. Further, the ECB’s updated staff mid-point projections for real GDP growth in 2013 was revised modestly lower to -0.6% while inflation in 2014 is still expected to remain well below target at 1.3%. They write, “Elevated long US dollar positioning is also likely being scaled back ahead of tomorrow’s US non-farm payrolls report. Leading indicators are signaling that employment growth likely slowed in May which may act to push back Fed QE3 tapering expectations.”
They begin by commenting that the euro is expected to remain relatively stable against the US dollar in the week ahead with the pair having traded roughly within a narrow 1.28 to 1.32 range since mid February. Further, the euro is edging back towards the top of that range in the near-term reflecting some tentative evidence that the euro-zone economy may be beginning to stabilize, which was acknowledged by ECB President Draghi at today’s monetary policy press conference.
They add however, that the weak growth and inflation outlook still leaves the door open to further monetary easing ahead which will dampen euro upside potential. Further, the ECB’s updated staff mid-point projections for real GDP growth in 2013 was revised modestly lower to -0.6% while inflation in 2014 is still expected to remain well below target at 1.3%. They write, “Elevated long US dollar positioning is also likely being scaled back ahead of tomorrow’s US non-farm payrolls report. Leading indicators are signaling that employment growth likely slowed in May which may act to push back Fed QE3 tapering expectations.”