12 Nov 2015
EURUSD seen falling to 0.95 in H1 2016 - Scotiabank
FXStreet (Córdoba) - EUR/USD is expected to fall to 0.95 in the first semester of 2016 amid divergent policy outlooks between the ECB and the Fed, according to Shaun Osborne, Chief FX Strategist at Scotiabank
Key Quotes
“The USD is trading mostly higher against its G10 peers on Thursday, mainly reflecting the weakness in the EUR, which slipped below 1.07 earlier in the session before rebounding. The EUR was weighed down by dovish comments from ECB President Draghi, who told the European Parliament that the likelihood of inflation returning to target had diminished somewhat while risks from global growth and trade were ‘clearly visible’.”
“The dovish undertone of the comments, which suggest further policy easing in December is quite possible, contrasts with remarks from other ECB governors lately which have stressed that further stimulus at the December 3rd ECB meeting is not a foregone conclusion.”
“We expect more stimulus (in the form of an extension of the QE programme as well as, potentially, a further reduction in the -0.20% depo rate). With the Fed also expected to raise rates later next month, we forecast EUR/USD falling to 0.95 in H1 2016.”
Key Quotes
“The USD is trading mostly higher against its G10 peers on Thursday, mainly reflecting the weakness in the EUR, which slipped below 1.07 earlier in the session before rebounding. The EUR was weighed down by dovish comments from ECB President Draghi, who told the European Parliament that the likelihood of inflation returning to target had diminished somewhat while risks from global growth and trade were ‘clearly visible’.”
“The dovish undertone of the comments, which suggest further policy easing in December is quite possible, contrasts with remarks from other ECB governors lately which have stressed that further stimulus at the December 3rd ECB meeting is not a foregone conclusion.”
“We expect more stimulus (in the form of an extension of the QE programme as well as, potentially, a further reduction in the -0.20% depo rate). With the Fed also expected to raise rates later next month, we forecast EUR/USD falling to 0.95 in H1 2016.”