30 Jan 2014
Flash: EUR/USD year-end target remains at 1.25 - Scotiabank
FXstreet.com (Barcelona) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank, reiterates her vision of the EUR/USD trading around 1.25 by year-end.
Key quotes
"EUR is weak, down 0.4% into the open and flirting with a sustained break back below the 100 ‐ day MA at 1.3601. The broader picture continues to be one where EUR is stuck trading within a fairly comfortable two ‐ month 385 ‐ point range of 1.3508 to 1.3893 (we remain EUR bears, targeting a year ‐ end close at 1.25). EUR has been supported by capital flows and improved con fidence; however weighing on it has been the overhanging risk of how the ECB will react to low in flationary pressures and subdued monetary and credit dynamics (con firmed again yesterday)."
"President Draghi’s weekend admission that the central bank could look to buying packages of private loans suggest that the ECB is preparing to ease further. During the last press conference Draghi provided two developments that would pressure the ECB to ease policy; there were: 1) upward pressure in money markets or 2) a worsening of the in flation outlook. Tomorrow’s CPI, where consensus expects January CPI to rise to 0.9%y/y on headline and core is a core risk for EUR."
"Today’s fundamental data were mixed with Germany reporting stronger than expected employment, adding 28k jobs in January, which pushed the unemployment rate down to 6.8%; while regional CPI releases suggest a building deflationary pressure month‐ over ‐ month."
Key quotes
"EUR is weak, down 0.4% into the open and flirting with a sustained break back below the 100 ‐ day MA at 1.3601. The broader picture continues to be one where EUR is stuck trading within a fairly comfortable two ‐ month 385 ‐ point range of 1.3508 to 1.3893 (we remain EUR bears, targeting a year ‐ end close at 1.25). EUR has been supported by capital flows and improved con fidence; however weighing on it has been the overhanging risk of how the ECB will react to low in flationary pressures and subdued monetary and credit dynamics (con firmed again yesterday)."
"President Draghi’s weekend admission that the central bank could look to buying packages of private loans suggest that the ECB is preparing to ease further. During the last press conference Draghi provided two developments that would pressure the ECB to ease policy; there were: 1) upward pressure in money markets or 2) a worsening of the in flation outlook. Tomorrow’s CPI, where consensus expects January CPI to rise to 0.9%y/y on headline and core is a core risk for EUR."
"Today’s fundamental data were mixed with Germany reporting stronger than expected employment, adding 28k jobs in January, which pushed the unemployment rate down to 6.8%; while regional CPI releases suggest a building deflationary pressure month‐ over ‐ month."