24 Apr 2014
Potential for further upside in EUR/USD? - Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, sees further strength in the EUR after Draghi's speech.
Key Quotes
The correlation between EUR/USD and credit indices is improving again, after falling apart in the middle of 2013 and barring a surprise, it still looks very much as though a turn in both credit spreads and EUR/USD is dependent on the Fed sounding more hawkish. That's not imminent".
"Meanwhile, there was nothing in the PMI data yesterday to really encourage hopes of near-term easing, and market chatter is sufficiently Euro bearish that I struggle to see how we can drift much lower".
"With the FT leading on the pressure for a rights issue at Deutsche, and M El-Erian observing that Europe still has a mountain of debt, there isn't any change in the underlying problems of lack of credit creation, fiscal austerity and sky-high unemployment; but the risk is that a bland speech from 'Super' Mario triggers more Euro strength".
Key Quotes
The correlation between EUR/USD and credit indices is improving again, after falling apart in the middle of 2013 and barring a surprise, it still looks very much as though a turn in both credit spreads and EUR/USD is dependent on the Fed sounding more hawkish. That's not imminent".
"Meanwhile, there was nothing in the PMI data yesterday to really encourage hopes of near-term easing, and market chatter is sufficiently Euro bearish that I struggle to see how we can drift much lower".
"With the FT leading on the pressure for a rights issue at Deutsche, and M El-Erian observing that Europe still has a mountain of debt, there isn't any change in the underlying problems of lack of credit creation, fiscal austerity and sky-high unemployment; but the risk is that a bland speech from 'Super' Mario triggers more Euro strength".