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8 Jan 2015
ECB QE and Greece election risks weighing on EUR and GBP – Westpac
FXStreet (Barcelona) - The FX Strategy Team at Westpac feel that heightened Greece election and ECB QE risks might lead EUR/USD to test 1.15/1.16 levels in coming weeks and create demand for EUR/GBP shorts.
Key Quotes
“EUR should continue to leak lower through much of January, certainly into the Greek election (25 Jan) and barely a couple days ahead of that, the ECB’s 22 Jan meeting, where odds continue to build that a full scale sovereign QE program is announced, along with some meaty detail rather than a vague pre-announcement.”
“EUR/USD on target for a test of 1.15/1.16 in coming weeks.”
“GBP’s sell-off is beginning to look overdone. Even allowing for the cooling in both growth momentum and BoE rate expectations EUR/GBP shorts are beginning to look appealing again given the near certain prospect of ECB sovereign QE and the return of the Eurozone peripheral political risks around the Greek election.”
“Surely the risks of a Syriza-led Greek government will prove to be more upsetting for markets than political uncertainty around Cameron’s re-election chances?.”
Key Quotes
“EUR should continue to leak lower through much of January, certainly into the Greek election (25 Jan) and barely a couple days ahead of that, the ECB’s 22 Jan meeting, where odds continue to build that a full scale sovereign QE program is announced, along with some meaty detail rather than a vague pre-announcement.”
“EUR/USD on target for a test of 1.15/1.16 in coming weeks.”
“GBP’s sell-off is beginning to look overdone. Even allowing for the cooling in both growth momentum and BoE rate expectations EUR/GBP shorts are beginning to look appealing again given the near certain prospect of ECB sovereign QE and the return of the Eurozone peripheral political risks around the Greek election.”
“Surely the risks of a Syriza-led Greek government will prove to be more upsetting for markets than political uncertainty around Cameron’s re-election chances?.”