8 Nov 2013
Flash: EUR/USD looks bullish for the week ahead - BTMU
FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts are bullish EUR/USD and see spot moving between a range of 1.3250-1.3550.
Key Quotes
“The euro has weakened sharply over the last week or so against the US dollar falling from an intra-day high of 1.3825 on the 25th October to an intra-day low of 1.3295 today.”
“Euro selling pressure has intensified following the ECB’s decision today. The ECB has explicitly stated that the euro area may face a “prolonged period” of low inflation. An ECB refi rate cut alone is unlikely to prove enough to lead to sustained euro weakness in the near-term.”
“However, weak growth and low inflation will keep pressure upon the ECB to ease monetary policy again in the future. The release of the Q3 GDP report in the week ahead is expected to confirm weak growth. On the other hand the US dollar is deriving support in the near-term from a reduction in investor pessimism over the outlook for the US economy.”
“The US economy expanded more strongly than expected in Q3 although driven mainly by an upside surprise to inventories. The release of the non-farm employment report for October will provide further evidence on the negative impact resulting from the government shutdown and debt ceiling uncertainty.”
“With the Fed unlikely to begin tapering QE until next year, the US dollar may struggle to build upon recent upward momentum in the near-term.”
Key Quotes
“The euro has weakened sharply over the last week or so against the US dollar falling from an intra-day high of 1.3825 on the 25th October to an intra-day low of 1.3295 today.”
“Euro selling pressure has intensified following the ECB’s decision today. The ECB has explicitly stated that the euro area may face a “prolonged period” of low inflation. An ECB refi rate cut alone is unlikely to prove enough to lead to sustained euro weakness in the near-term.”
“However, weak growth and low inflation will keep pressure upon the ECB to ease monetary policy again in the future. The release of the Q3 GDP report in the week ahead is expected to confirm weak growth. On the other hand the US dollar is deriving support in the near-term from a reduction in investor pessimism over the outlook for the US economy.”
“The US economy expanded more strongly than expected in Q3 although driven mainly by an upside surprise to inventories. The release of the non-farm employment report for October will provide further evidence on the negative impact resulting from the government shutdown and debt ceiling uncertainty.”
“With the Fed unlikely to begin tapering QE until next year, the US dollar may struggle to build upon recent upward momentum in the near-term.”