EUR/USD heading towards 1.0480 - Natixis

In its latest weekly forex trends report on G10 currencies, Analysts at Natixis provide a brief outlook on EUR/USD for the week ahead.

Key Points:

The EUR/USD ended up correcting below 1.07 after a high at 1.082 after the surge in political risks in France (due notably to François Fillon’s woes) as well as in the Netherlands, Italy and Greece.

Peripheral debts and French debt have struggled particularly. In this respect, 3-month Risk Reversals 25D highlight the French risk, with a sharp fall of the EUR/USD anticipated over a 3-month horizon.

Furthermore, Mario Draghi has come out in defence of the position taken by the European Central Bank after the attacks by Donald Trump directed at Germany (and indirectly the central bank), accused of manipulating the rate of exchange for the euro. He reiterated the need for the APP to run its full course.