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5 Feb 2015
EUR/USD may head lower irrespective of the Greek outcome – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, notes that there is scope for EUR/USD to head lower irrespective of the outcome for Greece, with divergent monetary policies between the eurozone and US expected to weaken EUR further.
Key Quotes
“Some comfort has been offered to the EUR this morning from strong German data and by an upward revision to the EU’s 2015 EZ growth forecast.”
“While uncertainties connected with Greece will offer near-term direction to EUR/USD, additional trading incentives are likely to be offered by US data.”
“Earlier this week we argued that profit-taking on USD long positions was likely a function of weaker US data releases and concerns that weak factory orders and the high level on inventories in Q4 could feed through to a more moderate gain in January non-farm payrolls, due tomorrow.”
“While changing expectations regarding the timing and pace of US rate hikes will lead to volatility in the USD this year, the relatively better outlook for growth in the US and the divergence course of monetary policy between the Fed and ECB suggests there is still scope for EUR/USD to head lower this year irrespective of the outcome for Greece.”
“We would look at pullbacks in the dollar as buying opportunities and therefore we favour selling EUR/USD on rallies on anticipation of a move towards 1.10 on a 12 mth view”
Key Quotes
“Some comfort has been offered to the EUR this morning from strong German data and by an upward revision to the EU’s 2015 EZ growth forecast.”
“While uncertainties connected with Greece will offer near-term direction to EUR/USD, additional trading incentives are likely to be offered by US data.”
“Earlier this week we argued that profit-taking on USD long positions was likely a function of weaker US data releases and concerns that weak factory orders and the high level on inventories in Q4 could feed through to a more moderate gain in January non-farm payrolls, due tomorrow.”
“While changing expectations regarding the timing and pace of US rate hikes will lead to volatility in the USD this year, the relatively better outlook for growth in the US and the divergence course of monetary policy between the Fed and ECB suggests there is still scope for EUR/USD to head lower this year irrespective of the outcome for Greece.”
“We would look at pullbacks in the dollar as buying opportunities and therefore we favour selling EUR/USD on rallies on anticipation of a move towards 1.10 on a 12 mth view”