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20 Aug 2015
EUR/USD: recovery limited - ANZ
FXStreet (Guatemala) - Analysts at ANZ noted the euro's recovery but remain bearish on the euro's outlook.
"EUR/USD has rallied as the market reassesses the prospects of an FOMC September hike, but it remains range bound."
"Oil price trends have been closely correlated with the euro over the past 12 months, so an extended rally may prove difficult to sustain."
"The twin balance is helping to contain the downside for the EUR.
"EUR/USD has been sandwiched in a broad 1.08-1.14 range since April. Much of the hitherto consolidation in EUR/USD has been associated with an improvement in euro area inflation, steepening in the yield curve, Q2 stabilisation in energy prices and the weakening and slow recovery in US activity earlier this year. Those developments encouraged a reassessment of the anticipated timing of future divergence in monetary policies, resulting in a stabilisation in EUR/USD."
"We anticipate that the upside for the euro and EUR/USD in particular is limited. Foremost, the ECB will be keen to maintain the current degree of monetary accommodation and the exchange rate, whilst not a policy target, has a role to play in this. Over coming months the ECB could underline the open-ended nature of its QE programme in order to re-enforce its current dovish forward guidance."
"EUR/USD has rallied as the market reassesses the prospects of an FOMC September hike, but it remains range bound."
"Oil price trends have been closely correlated with the euro over the past 12 months, so an extended rally may prove difficult to sustain."
"The twin balance is helping to contain the downside for the EUR.
"EUR/USD has been sandwiched in a broad 1.08-1.14 range since April. Much of the hitherto consolidation in EUR/USD has been associated with an improvement in euro area inflation, steepening in the yield curve, Q2 stabilisation in energy prices and the weakening and slow recovery in US activity earlier this year. Those developments encouraged a reassessment of the anticipated timing of future divergence in monetary policies, resulting in a stabilisation in EUR/USD."
"We anticipate that the upside for the euro and EUR/USD in particular is limited. Foremost, the ECB will be keen to maintain the current degree of monetary accommodation and the exchange rate, whilst not a policy target, has a role to play in this. Over coming months the ECB could underline the open-ended nature of its QE programme in order to re-enforce its current dovish forward guidance."