16 Jan 2015
Euro downtrend might slow briefly after ECB’s QE move – SG
FXStreet (Barcelona) - Kit Juckes of Societe Generale feels that with the SNB adding extra volatility in the markets and treasuries and Yen seeing shorts being squeezed, euro might replicate this and cause its downtrend to slow after ECB makes its QE move.
Key Quotes
“The SNB's decision to ditch the EUR/CHF peg has added to pressure on the Euro ahead of the anticipated announcement of QE at next week's ECB meeting. It also supports the dollar, and as cross-currents affecting currency markets multiply, it will continue to support volatility. That in turn helps the yen, where shorts have been squeezed this month. And Treasuries, where shorts have also been squeezed (violently).”
“At some point outsized Euro shorts will get squeezed too, perhaps after the ECB has made its move, but that will only represent a temporary speed-bump, briefly slowing the downtrend.”
Key Quotes
“The SNB's decision to ditch the EUR/CHF peg has added to pressure on the Euro ahead of the anticipated announcement of QE at next week's ECB meeting. It also supports the dollar, and as cross-currents affecting currency markets multiply, it will continue to support volatility. That in turn helps the yen, where shorts have been squeezed this month. And Treasuries, where shorts have also been squeezed (violently).”
“At some point outsized Euro shorts will get squeezed too, perhaps after the ECB has made its move, but that will only represent a temporary speed-bump, briefly slowing the downtrend.”