EUR/USD is already well below fair value - ING

Analysts at ING think that EUR/USD is currently trading around 12% below it’s fair value (based on a range of metrics) and that’s held EUR/USD back from falling considerably below 1.05 this year, despite elevated political risks and excitement about Trump.

Key Quotes

“We think will only reinforce the upside Euro risk.”

“Election risk news has a diminishing effect…

• There is still a clear risk to the Euro from next year’s Italian election.
• But negative political news is having a reduced effect on the Euro, compared to in the Greek crises.
• That might be linked to the ECB regaining credibility to “do whatever it takes” to save the Euro.”