EUR/USD on a rollercoaster ride – Danske Bank

Piet P. H. Christiansen, senior analyst at Danske Bank, explains that the EUR/USD pair notably took a rollercoaster ride yesterday on weak PMIs, the ECB meeting and negative comments from US commerce secretary, Ross on the trade deal outlook with China.

Key Quotes

“We still think the first hike is a tad too distant/fragile for FX markets to send EUR significantly higher, but as H1 progresses, we expect the next stage in a EUR/USD rebound to reached via a US-China trade deal.”

“Associated CNY appreciation would further help keep the effective EUR from strengthening too much which would in turn pave the way for ECB. For true lift-off in EUR/USD towards the high 1.20s as warranted by valuation, we need to get closer to confirmation that the ECB intends to move on rates - and that will likely not happen until H2, but we are gradually moving in that direction.”