15 Nov 2013
Flash: EUR outlook bearish on struggle to keep reforms on track - BMO Capital Markets
FXstreet.com (Barcelona) - Stephen Gallo, European Head of Currency Strategy at BMO Capital Markets comments that the struggle to keep the pace of reforms on track, and the difficulties which should culminate with reforms having a greater weight are an important factor for his bearish 6-to-12-month outlook on the EUR.
Key Quotes
“Since the ECB will remain the ‘glue’ keeping everything stuck together (easy policies), the path of least resistance for the EUR is generally lower in this regard. Elsewhere, if there was a fundamental factor in the driving seat to end the week, we suspect it was that Yellen’s tone yesterday was largely ‘in the price’.”
“If anything, probabilities of a December or January ‘taper’ by the Fed are probably lower in cumulative terms today than they were prior to Yellen, but since those probabilities were already very low, the USD barely moved to the downside.”
“Topside bets, as well as barrier and strike-related activity in USD/JPY this morning in London have probably also kept a lid of USD weakness.”
Key Quotes
“Since the ECB will remain the ‘glue’ keeping everything stuck together (easy policies), the path of least resistance for the EUR is generally lower in this regard. Elsewhere, if there was a fundamental factor in the driving seat to end the week, we suspect it was that Yellen’s tone yesterday was largely ‘in the price’.”
“If anything, probabilities of a December or January ‘taper’ by the Fed are probably lower in cumulative terms today than they were prior to Yellen, but since those probabilities were already very low, the USD barely moved to the downside.”
“Topside bets, as well as barrier and strike-related activity in USD/JPY this morning in London have probably also kept a lid of USD weakness.”