EUR: Grinding lower - BBH

Research Team at BBH, notes that the euro is grinding lower and has dropped two cents this week to record a low below $1.1020 in the European morning. 

Key Quotes

“This means that it has taken out the trendline drawn off the January, June, and July lows.  It intersected today around $1.1035.   A break of $1.10 brings those June and July lows into view (~$1.0915 and $1.0950 respectively).

The main driver seems to be the widening interest rate differentials between the US and Germany.  The two-year differential is near 154 bp today, the highest level in a decade.  The US 10-year premium is also widening and near 242 bp, back to levels not seen since March.”