5 Mar 2015
EUR/USD could squeeze higher on Draghi – Westpac
FXStreet (Edinburgh) - Strategist at Westpac Richard Franulovich sees the likeliness of a short-lived rebound in EUR/USD following Drgahi’s presser,although the leg lower should resume afterwards.
Key Quotes
“EUR/USD should trade sub 1.10 in coming days, though not before potentially squeezing higher on Draghi’s press conference, where he may “inadvertently” sound more optimistic in light of recent green shoots on the activity front, potentially raising doubts about the Bank’s QE commitment”.
“Updated staff projections showing a quicker return to 2% inflation than is currently the case (latest 2015: 0.7%, 2016: 1.3%) may add to the message”.
“The bounce though should be short-lived amid a still very poor capital flow backdrop, with the latest BoP data showing heavy net selling of both Eurozone bonds and stocks from both residents and nonresidents in recent months”.
Key Quotes
“EUR/USD should trade sub 1.10 in coming days, though not before potentially squeezing higher on Draghi’s press conference, where he may “inadvertently” sound more optimistic in light of recent green shoots on the activity front, potentially raising doubts about the Bank’s QE commitment”.
“Updated staff projections showing a quicker return to 2% inflation than is currently the case (latest 2015: 0.7%, 2016: 1.3%) may add to the message”.
“The bounce though should be short-lived amid a still very poor capital flow backdrop, with the latest BoP data showing heavy net selling of both Eurozone bonds and stocks from both residents and nonresidents in recent months”.