Greg Gibbs, Analyst at Amplifying Global FX Capital, suggests that an issue that may dampen a quick or full recovery in the EUR is the risk of increasing tension between the US and the EU over Iran sanctions and trade.
Key Quotes
“EU companies will face sanctions from the US if they continue to do business with Iran. And disagreement over the Iran deal may exacerbate a brewing argument over trade.”
“Now that the US administration has extracted some concessions from China on trade and moved negotiations onto a more extended timeline, it could turn its attention to pressuring Europe to reduce its trade surplus with the US.”
“The ECB has highlighted a possible trade war as a downside risk for the Eurozone economy. Any increase in tensions between the US and the EU may be seen as undermining business confidence and delaying ECB QE exit.”
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