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3 Apr 2014
EUR to weaken further - BTMU
FXStreet (Guatemala) - FX Strategists at the Bank of Tokyo Mitsubishi UFJ explained that the euro is likely to weaken further in the week ahead.
Key Quotes
"The euro is likely to weaken further against the US dollar in the week ahead following today’s ECB policy meeting. While the ECB did not ease monetary policy at today’s meeting, they did signal that they are moving closer to implementing further unconventional policy easing which could include lowering the deposit rate into negative territory and/or implementing someform of QE."
"Those measures will likely prove more effective at lifting inflation expectations in the euro-zone which will help lower real yields and the euro. The ECB also signalled that they are monitoring closely the euro highlighting a higher sensitivity to euro strength which would increase downside risks to already low inflation."
"In contrast, the US dollar is likely to derive support from further evidence that the US economy is rebounding. A strong non-farm payrolls report would likely trigger both a higher US dollar and US yields."
Key Quotes
"The euro is likely to weaken further against the US dollar in the week ahead following today’s ECB policy meeting. While the ECB did not ease monetary policy at today’s meeting, they did signal that they are moving closer to implementing further unconventional policy easing which could include lowering the deposit rate into negative territory and/or implementing someform of QE."
"Those measures will likely prove more effective at lifting inflation expectations in the euro-zone which will help lower real yields and the euro. The ECB also signalled that they are monitoring closely the euro highlighting a higher sensitivity to euro strength which would increase downside risks to already low inflation."
"In contrast, the US dollar is likely to derive support from further evidence that the US economy is rebounding. A strong non-farm payrolls report would likely trigger both a higher US dollar and US yields."