EUR/USD wary on US politics – Danske Bank

Kristoffer Lomholt, Senior Analyst at Danske Bank, gave his view on the prospects for the single currency regarding US politics.

Key Quotes

“EUR/USD has edged higher again despite the slightly weaker than expected German inflation figures yesterday. Indeed, after having seen a slide since late last week on the German vote, Fed talk and the US tax proposal, the cross seems close to a point of satisfaction”.

“The Catalonian independence vote this weekend has the potential to add to a political risk premium in the single currency but in the case of a ‘No’, we look for EUR/USD to start bottoming out”.

“However, key to the outlook for USD crosses in coming weeks will be whether the ‘Big 6’ will get support for their tax reparation proposal, as this has the potential to spur US capital inflows”.