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1 Jul 2014
EUR/USD: Draghi could talk down the euro - BBH
FXStreet (Córdoba) - The BBH analyst team commented that EUR/USD is back at pre-June ECB meeting levels, which could lead Draghi to talk down the shared currency next Thursday.
Key quotes
“It's worth noting that the euro is now back above pre-June ECB rate cut levels. While the ECB does not target exchange rates, it can’t be too happy with renewed euro strength that will complicate the disinflationary environment. It’s possible that Draghi pushes back a bit on the strong euro at his press conference”.
“Perhaps the US jobs number could also give the dollar some traction, but absent a huge upside miss (maybe 300k or more vs. 215k consensus), low UST yields are likely to continue weighing on the dollar. Retracement objectives for the euro from its May-June drop come in near $1.3690, $1.3750, and then $1.3800”.
“With cable making new multi-year highs, we need to take a longer-term view. The next major retracement objective (50%) of the 2007-2009 drop in cable comes in near $1.7330”.
Key quotes
“It's worth noting that the euro is now back above pre-June ECB rate cut levels. While the ECB does not target exchange rates, it can’t be too happy with renewed euro strength that will complicate the disinflationary environment. It’s possible that Draghi pushes back a bit on the strong euro at his press conference”.
“Perhaps the US jobs number could also give the dollar some traction, but absent a huge upside miss (maybe 300k or more vs. 215k consensus), low UST yields are likely to continue weighing on the dollar. Retracement objectives for the euro from its May-June drop come in near $1.3690, $1.3750, and then $1.3800”.
“With cable making new multi-year highs, we need to take a longer-term view. The next major retracement objective (50%) of the 2007-2009 drop in cable comes in near $1.7330”.