7 Jul 2014
EUR/GBP heading for 0.78 region - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that even though recent comments from ECB hawk Weidmann warned about risks to financial stability from keeping monetary policy too loose, he made clear that he was fully on board with the measures announced by the committee last month.
“He remarked that “the point is to prevent a phase of inflation that is too low for too long, as this could cripple the economy in the Eurozone””.
“Although to date, the dovish sentiments from ECB officials have had limited effect on undermining the value of the EUR, as the market becomes increasingly confident in its assessment of the divergence of the policy outlooks between the ECB and other central banks, a reaction is likely to be played out in the EUR crosses”.
“We see scope for EUR/GBP to end the year in the 0.78 region and to continue heading lower into 2015 towards the 0.77 level on a 12 mth view”.
“He remarked that “the point is to prevent a phase of inflation that is too low for too long, as this could cripple the economy in the Eurozone””.
“Although to date, the dovish sentiments from ECB officials have had limited effect on undermining the value of the EUR, as the market becomes increasingly confident in its assessment of the divergence of the policy outlooks between the ECB and other central banks, a reaction is likely to be played out in the EUR crosses”.
“We see scope for EUR/GBP to end the year in the 0.78 region and to continue heading lower into 2015 towards the 0.77 level on a 12 mth view”.