21 Jan 2014
Flash: EUR/USD - US/German 2yr rate differential at range high - BBH
FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that key EUR/USD indicator, the US-German 2-year interest rate differential is climbing to range highs.
Key Quotes
"We note that the US-German 2-year interest rate differential is above 20 bp and is at the upper end of its six month range, even though EONIA remains elevated."
"The only euro area economic report to note today seemed to confirm the recovery in the German economy, with the ZEW survey showing the current assessment was stronger than expected (41.2 vs. 35.0 consensus and 32.4 in December), while the expectations component remained elevated at 61.7 (vs. 62 in December and a Bloomberg consensus for 64). It is the first decline in the expectations measure in six months."
Key Quotes
"We note that the US-German 2-year interest rate differential is above 20 bp and is at the upper end of its six month range, even though EONIA remains elevated."
"The only euro area economic report to note today seemed to confirm the recovery in the German economy, with the ZEW survey showing the current assessment was stronger than expected (41.2 vs. 35.0 consensus and 32.4 in December), while the expectations component remained elevated at 61.7 (vs. 62 in December and a Bloomberg consensus for 64). It is the first decline in the expectations measure in six months."