ECB loosening its asset purchasing restrictions may have put a floor under EUR/USD, but the failure of Eurogroup to find fiscal cooperation will weigh on EUR, according to analysts at Westpac Institutional Bank.
Key quotes
“Next week’s follow-up Eurogroup summit (7th Apr) will be a critical test of the ability of the region’s FinMins and leaders to obtain at least a face-saving means of subduing tensions.”
“The stumbling block remains the apparent intransigence of Germany and Holland on any perceived loosening of southern EU budgets supported by northern nations.”
“The strains have acted as a cap on EUR/USD. Despite rebounding firmly above 1.10, the failure to hold onto those gains highlights the potential for another slide towards 1.07/1.08 should Eurogroup fail once again to find accord.”
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