EUR/USD could breach 1.10 soon – Westpac

Richard Franulovich, Strategist at Westpac, expects the pair to grind lower towards levels sub-1.1000 in the near term.

Key Quotes

“EUR/USD going nowhere fast but risks building for sustained sub-1.10 soon”.

“A more complete take on Brexit’s impact on EZ won’t be seen until the ECB’s Sep meeting, when projections are updated, but the Jul 21 ECB could still trigger a fresh downleg in EUR, Draghi sure to reiterate downside risks and may even “pre-announce” a QE extension beyond Mar 2017. Between now and then though EUR could firm past 1.12”.

“The USD is struggling to develop traction in the face of decent data, reassuringly strong payrolls and PMIs doing more to boost risk appetite than catalyse a repricing of Fed expectations. That is unlikely to change near term and while that benefits AUD, EM currencies, et al, EUR is nonetheless a marginal beneficiary”.