Flash: EUR gains capped by Eurozone political uncertainty – BMO Capital Markets

FXstreet.com (New York) - Stephen Gallo at BMO Capital Markets analyzes the long-term outlook of the EUR as it concerns the bourgeoning string of political crises across the European continent.

Key quotes

“A number of major economies will remain vulnerable if rates rise sharply in the quarters ahead, but we believe that the Euro Area currently has one of the lower thresholds for pain in this regard.

“Despite its size and liquidity persistent vulnerabilities in a number of Euro Area economies will bestow some of the properties of a developing market currency on the EUR if rates move up aggressively. Elevated levels of political uncertainty should also act to cap EUR gains.”