EUR/USD: all about European politics now - Nomura

Analysts at Nomura explained that European politics remain the market’s focus with the event risks over the next 12 months.

Key Quotes:

"The impact of risk sentiment on EUR has been changing. In 2010-11, EUR tended to weaken in a risk-off environment.

The relationship has changed under the ECB’s QE, and until recently EUR tended to appreciate amid risk-off. The relationship keeps changing, and currently EUR is reacting more neutrally to risk sentiment.

The direction of the correlation will be important for how EUR/USD trades into 2017, and will be linked to ECB policy."