Yujiro Goto, Research Analyst at Nomura, suggests that the introduction of the new forward guidance by the ECB will trim the upside risks for euro area yields and EUR for the time being.
Key Quotes
“This is likely to delay any re-acceleration of EUR appreciation, which we had expected to happen over the summer. Nonetheless, we still judge EUR to be in the medium-term appreciation trend that has persisted since early 2017, as the ECB is still firmly on track to normalise its policy. EUR range trading should continue for the time being, before EUR appreciation resumes in early 2019.”
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