EUR/USD: Further Correction Likely N-Term As European Investors Left ‘Over-Hedged’ – Barclays

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The euro is rising amid a better market mood but remains in a wait-and-see mode. Can it continue higher?

Here is their view, courtesy of eFXnews:

Barclays Capital Research discusses EUR/USD this week and thinks that further risk reduction should continue to weigh on the pair.

“Investors seem most heavily positioned in growth-sensitive currencies, including the EUR funded with safe-haven currencies. The sell-off in US equities has likely left European investors over-hedged on their EURUSD exposure, with the ones undertaking more active rebalancing having to buy the USD back. Moreover, German political risks remain, in our view,” Barclays argues.

“This week, ECB speakers are unlikely to provide new information on the likely path of ECB policy, in our view. On the data front, we expect German GDP growth (Wednesday) to stabilize at 0.7% q/q in Q4 17 and EA Q4 17 GDP to be confirmed at 0.6% q/q (both Wednesday),” Barclays adds.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.