4 Mar 2015
EUR/USD preparing for ECB QE, to end year at 1.10 – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, views that the net result of ECB’s QE and Fed rate hike expectations might keep the EUR soft into spring and summer, expecting EUR/USD to end the year at 1.10 levels and then move further lower towards 1.08.
Key Quotes
“Falling Eurozone bond yields –on the back of speculation that the ECB could find it difficult to find sellers of bonds as it launches its QE programme– have undermined the EUR and driven up the USD’s yield advantage.”
“Even though German economic data have seen some improvement, the dynamics behind the ECB’s forthcoming QE programme look set to have a more overwhelming impact on yields and thus on the EUR in the coming weeks as investors position themselves for the start of the bond buying programme.”
“Market speculation that foreign holders of eurozone bonds may be more prepared to sell their holdings to the ECB could heighten the downside impact of the ECB’s programme on the EUR, particularly in the early phase of the programme.”
“The combination of speculation regarding the ECB’s bond buying programme and the timing of the Fed’s first rate hike looks set to dominate the outlook for EUR/USD into the spring and summer.”
“We expect that the net result of these factors will have a negative impact on EUR/USD, with the possibility of choppy trading as expectations regarding the Fed’s policy adjust.”
“We see EUR/USD at around 1.10 at the end of this year and trending towards 1.08 on a 12 to 15 months view.”
Key Quotes
“Falling Eurozone bond yields –on the back of speculation that the ECB could find it difficult to find sellers of bonds as it launches its QE programme– have undermined the EUR and driven up the USD’s yield advantage.”
“Even though German economic data have seen some improvement, the dynamics behind the ECB’s forthcoming QE programme look set to have a more overwhelming impact on yields and thus on the EUR in the coming weeks as investors position themselves for the start of the bond buying programme.”
“Market speculation that foreign holders of eurozone bonds may be more prepared to sell their holdings to the ECB could heighten the downside impact of the ECB’s programme on the EUR, particularly in the early phase of the programme.”
“The combination of speculation regarding the ECB’s bond buying programme and the timing of the Fed’s first rate hike looks set to dominate the outlook for EUR/USD into the spring and summer.”
“We expect that the net result of these factors will have a negative impact on EUR/USD, with the possibility of choppy trading as expectations regarding the Fed’s policy adjust.”
“We see EUR/USD at around 1.10 at the end of this year and trending towards 1.08 on a 12 to 15 months view.”