30 Jul 2015
EUR/USD still seen at 1.05 in 12-month – Rabobank
FXStreet (Edinburgh) - According to Jane Foley, Senior Currency Strategist at Rabobank, the pair could visit the 1.05 area in a year’s time.
Key Quotes
“Earlier this week as investors were reeling from Monday’s sharp plunge in the Chinese stock market, all EM currencies underperformed the EUR”.
“The very low interest rates in the Eurozone mean that the EUR is a likely candidate for a funding currency”.
“However, the carry trade only works properly when risk appetite is strong”.
“The fact that the Eurozone has a strong current account surplus appears to support the EUR in times of elevated uncertainty”.
“Thus, while we expect EUR/USD to trend lower in the coming months on the back of widening interest rate differentials, concerns about weak growth in China, worries about the coherence of EMU and a splattering of political uncertainty in countries such as Turkey and Poland threaten to slow the pace”.
“We maintain a 12 mth forecast for EUR/USD at 1.05”.
Key Quotes
“Earlier this week as investors were reeling from Monday’s sharp plunge in the Chinese stock market, all EM currencies underperformed the EUR”.
“The very low interest rates in the Eurozone mean that the EUR is a likely candidate for a funding currency”.
“However, the carry trade only works properly when risk appetite is strong”.
“The fact that the Eurozone has a strong current account surplus appears to support the EUR in times of elevated uncertainty”.
“Thus, while we expect EUR/USD to trend lower in the coming months on the back of widening interest rate differentials, concerns about weak growth in China, worries about the coherence of EMU and a splattering of political uncertainty in countries such as Turkey and Poland threaten to slow the pace”.
“We maintain a 12 mth forecast for EUR/USD at 1.05”.