26 Aug 2015
EUR/USD: parity now unlikely by year-end – BTMU
FXStreet (Edinburgh) - Derek Halpenny, European Head of GMR at BTMU, sees the possibility of the pair reaching the parity level by year end quite unlikely at the moment.
Key Quotes
“Our bearish EUR/USD view will have to be adjusted to take account of this financial market turmoil triggered by the renminbi devaluation. Extreme risk aversion has clearly resulted in a further liquidation of euro short speculative positions, surely partly versus the renminbi, and hence our current year-end forecast of parity looks difficult to achieve”.
“However, the profile will still certainly remain for the euro to move lower. The relative monetary policy factor has weakened due to the financial market turmoil given the markets were close to positioned for a September rate increase but the deflationary shock stemming from the turmoil is more worrying for the ECB than it is for the Federal Reserve”.
Key Quotes
“Our bearish EUR/USD view will have to be adjusted to take account of this financial market turmoil triggered by the renminbi devaluation. Extreme risk aversion has clearly resulted in a further liquidation of euro short speculative positions, surely partly versus the renminbi, and hence our current year-end forecast of parity looks difficult to achieve”.
“However, the profile will still certainly remain for the euro to move lower. The relative monetary policy factor has weakened due to the financial market turmoil given the markets were close to positioned for a September rate increase but the deflationary shock stemming from the turmoil is more worrying for the ECB than it is for the Federal Reserve”.