7 Apr 2014
EUR/USD to hold range, for now - Danske Bank
FXStreet (Barcelona) - Kasper Kirkegaard, Chief Analyst at Danske Bank notes that EUR/USD has been trading sideways since the ECB meeting last week and with the ECB likely to remain on hold for a while and the Fed to continue its tapering path, there are no indications that we are about to leave the range for now.
Key Quotes
“Given that our inflation forecast is still well below the ECB forecast and given the very soft rhetoric from Draghi last week, we are now more certain that the ECB will eventually have to ease further.”
“It also means that the peak in EUR/USD in this cycle might now be behind us and we still look for a lower EUR/USD on a 6- to 12-month horizon based on relative monetary policy.”
“The next decisive event for EUR/USD could be the FOMC minutes from the March meeting, which are due on Wednesday. At the March meeting the FOMC surprised and revised up the rate path by 50bp by the end of 2016 and it will be interesting to take a look at the considerations behind the update of the forward guidance.”
Key Quotes
“Given that our inflation forecast is still well below the ECB forecast and given the very soft rhetoric from Draghi last week, we are now more certain that the ECB will eventually have to ease further.”
“It also means that the peak in EUR/USD in this cycle might now be behind us and we still look for a lower EUR/USD on a 6- to 12-month horizon based on relative monetary policy.”
“The next decisive event for EUR/USD could be the FOMC minutes from the March meeting, which are due on Wednesday. At the March meeting the FOMC surprised and revised up the rate path by 50bp by the end of 2016 and it will be interesting to take a look at the considerations behind the update of the forward guidance.”