20 Feb 2015
EUR could accelerate the decline in H1… to revert it later? – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Christin Tuxen sees the pair testing lower levels during the first half of 2015, although recovering in the second part of the year.
Key Quotes
“We see room for another round of EUR weakness driven by omnipresent political risks (Russia/Ukraine and Greece) and downside to money-market rates when the ECB starts QE in March”.
“Along with the oil-price drop and better credit conditions the EUR weakness brought about by ECB QE should, however, pave the way for the ECB to become less dovish earlier than the market currently expects”.
“Coupled with our view that the Fed will hike already mid year and that the re-pricing of the US yield curve will happen swiftly around the first hike, the potential for upside to US rates will be limited beyond 6M. EUR/USD downside from relative rates should thus be concentrated in H1”.
Key Quotes
“We see room for another round of EUR weakness driven by omnipresent political risks (Russia/Ukraine and Greece) and downside to money-market rates when the ECB starts QE in March”.
“Along with the oil-price drop and better credit conditions the EUR weakness brought about by ECB QE should, however, pave the way for the ECB to become less dovish earlier than the market currently expects”.
“Coupled with our view that the Fed will hike already mid year and that the re-pricing of the US yield curve will happen swiftly around the first hike, the potential for upside to US rates will be limited beyond 6M. EUR/USD downside from relative rates should thus be concentrated in H1”.