“While there is still optimism that the slowdown in European growth will be shallow and temporary, politics could cast a longer shadow over the EUR this year,” Rabobank analysts note.
Key quotes
“It is clear that the Yellow Vest protests in France have thrown President’s Macron’s market-friendly reformist agenda well off course. This factor coupled with the risk that the European Parliamentary elections could highlight populist undercurrents in the region could weigh on the EUR into the spring. Yellow vest protesters have announced that they will create a list of candidates for May’s European parliamentary elections and this strengthens the view that Eurosceptic populists could win a louder voice in EU affairs.”
“While we expect choppy trading in EUR/USD over the coming weeks as the market assesses economic and political developments in both the US and the Eurozone, we are reluctant to rule out the risk of a move below the EUR/USD1.13 level in the coming months.”
Share
