Flash: ECB to set stage for a lower EUR/USD - BNZ

FXstreet.com (Barcelona) - Bank of New Zealand Economists are expecting a prompt positive response to the impasse with the Troika over Greece’s €8.1bn bail-out tranche, according to Mike Jones, who holds the position of Currency Strategist at the Bank.

However, Jones notes "the Portuguese situation may deteriorate before it gets better and fresh elections cannot be ruled out." Meanwhile, Jones view on the upcoming ECB rate decision and President Draghi press conference is still negative for the interest of the Euro, expecting Draghi to "maintain a dovish tack (talking up non-conventional policies)."

Jones thinks "the stage may be set for the EUR to head lower and more fully reflect the recent tick-up in peripheral yields." BNZ forecast is for a slide to 1.2700 in Q3.