21 Aug 2013
How much room until potential EUR/USD reversal?
FXstreet.com (Barcelona) - The market was somewhat bewildered to see the EUR/USD hit a fresh 6-month amid the continuous sell-off in emerging market assets, as overweight EM US-based funds' repatriation should have been positive for the USD.
According to John Noonan, Head of IFR Markets: "The strength in the EUR, GBP & CHF vs the USD is most likely being driven by global funds having to unwind underweight Europe/overweight EM positions due to the recent EM selloff." Noonan also points at the volatility in Treasuries as a factor driving the EUR higher as uncertainty over timing of Fed taper continues.
In conclusion, Noonan believes that "the USD should regain ascendancy vs European currencies & the JPY once Fed tapering is fully priced into Treasuries.
According to John Noonan, Head of IFR Markets: "The strength in the EUR, GBP & CHF vs the USD is most likely being driven by global funds having to unwind underweight Europe/overweight EM positions due to the recent EM selloff." Noonan also points at the volatility in Treasuries as a factor driving the EUR higher as uncertainty over timing of Fed taper continues.
In conclusion, Noonan believes that "the USD should regain ascendancy vs European currencies & the JPY once Fed tapering is fully priced into Treasuries.