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What is the outlook for EUR in the coming weeks?

Here is their view, courtesy of eFXdata:

MUFG Research flags a scope for EUR underperformance over the coming weeks.

“The EUR has been one of the worst-performing G10 currencies so far this year alongside the other low/negative yielding currencies of the CHF and JPY…The EUR’s recent failure to continue to strengthen on the back of the ongoing improvement in global investor risk sentiment could suggest/encourage more use of the EUR as a funding currency, and/or reflect more concern amongst market participants that the euro area will not benefit as much from global recovery optimism,” MUFG notes.

The developments suggest that the EUR could continue to underperform in the near-term alongside other low yielding currencies, but there is upside potential for the EUR if relative pessimism over the euro area growth outlook proves overdone,” MUFG adds.

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