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Parity in EUR/USD is only a matter of time – BAML

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) - BofA Merrill Lynch Global Research expects spot to reach the parity level early next year.

    Key Quotes

    “We still expect EUR/USD to weaken to 1.05 by end-2015 and to parity in Q1 2016”.

    “This is 15% below our estimated equilibrium, which is reasonable to expect when monetary policies diverge”.

    “EUR/USD has already weakened in recent weeks, as markets expect ECB QE2 in December”.

    “We expect the ECB to deliver (a strong conviction), which together with a Fed hike in Dec (a close call) should push the euro lower. If the Fed waits, then we will have to just move our projection path forward”.
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