EUR/USD remains under pressure – Danske Bank

Chief Analyst at Danske Bank Arne Rasmussen gave his views on the pair ahead of the upcoming events.

Key Quotes

“Last week’s three big-figure drop in EUR/USD was indeed warranted in our view, as the move to 1.09 was not justified by short-term factors such as relative interest rates”.

“Speculative positioning appears very light, meaning the cross could be very sensitive on the downside if the minutes from the latest FOMC and/or ECB meeting (both released this week) point to more pronounced divergence in the focus of the two central banks”.

“Data on the US labour market and manufacturing sector (ISM) may point to some deceleration in US activity but we expect that this will, if anything, be a EUR/USD negative in the current environment, where the global business cycle risk may be close to a local peak, making risk sentiment vulnerable and set to put the ECB under renewed pressure”.