9 Jan 2015
EUR/USD headed to 1.1300 - Scotiabank
FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank explained the current focus around the ECB and the EUR.
Most of the focus was on several media reports citing ECB officials that staff have researched a €500bn investment grade bond buying program. The market is likely expecting a larger program that would bring them closer to their balance sheet expansion target more rapidly. German data was disappointing with exports unexpectedly falling -12.1%m/m and stronger imports driving a narrowed trade balance combined with mixed industrial production, that included a weak headline of –0.1%m/m but an upward revision to October’s release."
"Medium‐term EUR outlook—the EUR lost 12% in 2014 and is expected to depreciate by a further 6.6% in 2015. Disappointment in the economic outlook coupled with aggressive central bank action and large outflows are likely to drive a downward trend in EUR with the currency closing 2015 at 1.13."
Most of the focus was on several media reports citing ECB officials that staff have researched a €500bn investment grade bond buying program. The market is likely expecting a larger program that would bring them closer to their balance sheet expansion target more rapidly. German data was disappointing with exports unexpectedly falling -12.1%m/m and stronger imports driving a narrowed trade balance combined with mixed industrial production, that included a weak headline of –0.1%m/m but an upward revision to October’s release."
"Medium‐term EUR outlook—the EUR lost 12% in 2014 and is expected to depreciate by a further 6.6% in 2015. Disappointment in the economic outlook coupled with aggressive central bank action and large outflows are likely to drive a downward trend in EUR with the currency closing 2015 at 1.13."