27 Feb 2015
Morgan Stanley: Is EUR the new JPY? – eFXnews
FXStreet (Barcelona) - The eFXnews Team notes Morgan Stanley views that the EUR may be gradually evolving into a negative-beta currency like JPY.
Key Quotes
“While EUR may be gradually evolving into a negative-beta currency like JPY, it is not there yet. The bearish EUR trade does not require a risk-on environment. While short-term position adjustments are always a risk, we do not see a shock to sentiment as powerful enough to reverse the EUR downtrend” MS concludes.”
“At the same time, increased foreign investor hedging of European equities is beginning to mirror Japan’s experience. This is limiting EUR’s ability to gain from equity inflows. As long as foreign investor hedging of European equities is popular, we expect EUR rebounds to be shallow and short-lived," MS adds.”
“EUR Forecasts: MS sees EUR/USD trading at 1.08 by end of Q2 and by 1.05 by the end of the year.”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
“While EUR may be gradually evolving into a negative-beta currency like JPY, it is not there yet. The bearish EUR trade does not require a risk-on environment. While short-term position adjustments are always a risk, we do not see a shock to sentiment as powerful enough to reverse the EUR downtrend” MS concludes.”
“At the same time, increased foreign investor hedging of European equities is beginning to mirror Japan’s experience. This is limiting EUR’s ability to gain from equity inflows. As long as foreign investor hedging of European equities is popular, we expect EUR rebounds to be shallow and short-lived," MS adds.”
“EUR Forecasts: MS sees EUR/USD trading at 1.08 by end of Q2 and by 1.05 by the end of the year.”
This content has been provided under specific arrangement with eFXnews.