5 Jun 2015
EUR/USD: Greek optimism and ECB warn of higher volatility - BTMU
FXStreet (Guatemala) - Analysts at Bank of Tokyo-Mitsubishi UFJ, Ltd noted that another squeeze of euro short positions was triggered overnight again by a sharp sell-off in the euro-zone government bond market.
Key Quotes:
"ECB President Draghi warned that investors should get used to periods of higher volatility at low interest rates triggering further position liquidation."
"Higher volatility in the euro-zone bond market is keeping euro volatility more elevated as well. It is not yet clear that the ongoing position adjustment is complete which could lift the euro further in the near-term."
"However, President Draghi stressed strongly that the ECB intends to fully implement its QE programme until at least September of next year, and that it was far too early for the ECB to discuss an exit strategy. With the ECB set to continue aggressively easing policy for the foreseeable future, we expect euro rebounds to prove unsustainable beyond the near-term."
"The euro has also derived temporary support from investor optimism that Greece is moving closer to an agreement with its creditors to receive short-term financing. Further signs of progress will be required in the week ahead to support current optimism."
Key Quotes:
"ECB President Draghi warned that investors should get used to periods of higher volatility at low interest rates triggering further position liquidation."
"Higher volatility in the euro-zone bond market is keeping euro volatility more elevated as well. It is not yet clear that the ongoing position adjustment is complete which could lift the euro further in the near-term."
"However, President Draghi stressed strongly that the ECB intends to fully implement its QE programme until at least September of next year, and that it was far too early for the ECB to discuss an exit strategy. With the ECB set to continue aggressively easing policy for the foreseeable future, we expect euro rebounds to prove unsustainable beyond the near-term."
"The euro has also derived temporary support from investor optimism that Greece is moving closer to an agreement with its creditors to receive short-term financing. Further signs of progress will be required in the week ahead to support current optimism."