EUR/USD corrected its losses all the way to 1.1450 and then retreated below 1.10. However, the battle around the round level is not over.
Nevertheless, the team at BTMU already watches levels below a bigger round level: parity.
Here is their view, courtesy of eFXnews:
The reversal in EUR/USD since the 15th May leaves Bank of Tokyo-Mitsubishi (BTMU) confident in its view that EUR/USD will continue to trend weaker and breach parity later this year.
“Long-term sovereign yields have started to drift lower again and the ECB intention to front-load QE debt buying ahead of illiquid summer trading conditions underlines the determination to implement its program in full. The ECB monetary policy meeting on 3 rd June is likely to include some upward revisions to growth and possibly inflation but we expect President Draghi to stress the ECB’s determination to carry out the QE program in full,” BTMU adds.
“Portfolio flow data continue to indicate strong net capital outflows from fixed income investments and with yields set to remain depressed in the eurozone relative to abroad, we expect that capital flow to continue weighing on the euro,” BTMU projects.
In line with this view, BTMU remains comfortable with its below consensus EUR/USD forecasts keeping its end-2015 EUR/USD target at 0.9800.
I ch
Share
