Chief Analyst at Danske Bank Jakob Christensen noted the single currency is still seen under pressure for the time being.
Key Quotes
“EUR/USD above 1.17 again yesterday after driven by the ECB sources story hinting that the next ‘normalisation’ move could come as early as at the meeting next week. We maintain however that the euro is likely to stay under pressure near term as the ECB should prefer to err on the side of caution in the current economic and political environment”.
“However, the Italian issue remains – not least as Conte’s speech confirmed yesterday that his government will pursue a radical programme. Thus, even if he stressed that a euro exit is not an option, Italy’s fiscal sustainability issue is out of the bottle and will not easily be captured again; this suggests that a EUR debt risk premium will linger for some time still”.
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