30 Apr 2015
EUR/USD: next stop 1.17? - SG
FXStreet (Barcelona) - According to Societe Generale, the next leg would for the single currency would be of a repricing of Eurozone curves as confidence in ECBs QE gets filtered in by the markets, which might lead EUR/USD to touch 1.17 levels.
Key Quotes
“Statistics had suggested we were reaching close to the end of the USD rally vs EUR (spectral analysis) though I thought we might still have another mini leg with a poor risk reward. For now we have barely taken out the liquidity risk premium as eurusd oscillates a tad below its short term fair value.”
“The next leg would be a repricing of Eurozone curves as evidence filters through that QE is somewhat doing the job. This would support the EUR again and I presume we will touch 1.17 at some point. Yet it changes little to its medium-term outlook.”
“EURUSD will be driven by yield differentials as emergency portfolio allocations out of the Eurozone were long done or mostly failed to happen as the exchange rate moved rapidly. Negative yields only cap the potential upside as new wealth (current account gains) and some old wealth reallocate.”
Key Quotes
“Statistics had suggested we were reaching close to the end of the USD rally vs EUR (spectral analysis) though I thought we might still have another mini leg with a poor risk reward. For now we have barely taken out the liquidity risk premium as eurusd oscillates a tad below its short term fair value.”
“The next leg would be a repricing of Eurozone curves as evidence filters through that QE is somewhat doing the job. This would support the EUR again and I presume we will touch 1.17 at some point. Yet it changes little to its medium-term outlook.”
“EURUSD will be driven by yield differentials as emergency portfolio allocations out of the Eurozone were long done or mostly failed to happen as the exchange rate moved rapidly. Negative yields only cap the potential upside as new wealth (current account gains) and some old wealth reallocate.”