EUR/USD probes downside, case for stronger dollar builds - ANZ

Brian Martin, Head of Global Economics, suggests that the expectations of divergent policy settings, future political risks, and ongoing portfolio diversification favour EUR/USD downside and ANZ looks for a move below 1.05 over the coming months.

Key Quotes

“The ECB will make a decision regarding QE in December and the balance of risks continues to point to an extension in the QE program.

The ECB did not discuss tapering at the October meeting, but ECB President Draghi did say that an abrupt end to QE seems unlikely.

The US election remains a potential source of volatility. That said, based on current opinion polls, the evidence from recent price action is that the FX market views a Clinton victory as USD positive.”