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EUR/JPY still faces downside pressure – Rabobank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 4, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Edinburgh) - Jane Foley, Senior Currency Strategist at Rabobank, sees the cross grinding lower in the near term.

    Key Quotes

    “Despite widespread speculation in the market that the BoJ will have to step up the pace of its huge QQE plan if it is to bolster inflation, the BoJ is maintaining a cautiously upbeat tone”.

    “Although the Bank on October 30 pushed back its expectation for hitting its 2% inflation forecast to H2 FY2016 from H1 that fiscal year, it remains of the view that Japan is seeing the benefits of a virtuous cycle since “against the background of steady improvement in the employment and income situation, private consumption has been resilient and housing investment has been picking up”.

    “The ECB by contrast appears to be positioning itself for a step up in its monetary policy stimulus as soon as December. This suggests there is scope for some modest downside pressures on EUR/JPY on a 1 to 3 month view”.

    “Given our view that the BoJ may still increase its policy stimulus this cycle, however, we see scope for another wave of yen losses during the course of 2016”.
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