31 Jul 2015
EUR/USD could break below the range, eyes on 1.06 – Westpac
FXStreet (Edinburgh) - Sean Callow, Strategist at Westpac, sees the pair breaching the current floor of the range at the 1.0800 mark, eventually.
Key Quotes
“As noted above, we expect underlying demand for US dollars but no dramatic rise”.
“This probably means EUR/ USD is not quite ready to break the closely-watched 1.08 support level that has held since April”.
“The euro has held up remarkably well through a European summer of great turmoil in Greece and ongoing, large scale ECB money printing… the Eurozone’s large trade surpluses are likely to be key to EUR resilience”
“Specifically, Germany’s trade surplus has risen from around EUR14bn per month early 2012 to an average of EUR21.5bn over the 3mths to May 2015, an annualized EUR258bn”.
“That’s a lot of demand for euros at a time when portfolio outflows will be dampened by European summer markets”.
“But given negative interest rates on deposits and QE contrasting to an upbeat Fed and US, it is hard not to expect that eventually EUR/USD will break lower, towards 1.06”.
Key Quotes
“As noted above, we expect underlying demand for US dollars but no dramatic rise”.
“This probably means EUR/ USD is not quite ready to break the closely-watched 1.08 support level that has held since April”.
“The euro has held up remarkably well through a European summer of great turmoil in Greece and ongoing, large scale ECB money printing… the Eurozone’s large trade surpluses are likely to be key to EUR resilience”
“Specifically, Germany’s trade surplus has risen from around EUR14bn per month early 2012 to an average of EUR21.5bn over the 3mths to May 2015, an annualized EUR258bn”.
“That’s a lot of demand for euros at a time when portfolio outflows will be dampened by European summer markets”.
“But given negative interest rates on deposits and QE contrasting to an upbeat Fed and US, it is hard not to expect that eventually EUR/USD will break lower, towards 1.06”.