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Parity to be the bottom for EUR/USD – ING

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 24, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Research Team at ING, suggests that at the point of EUR/USD parity (or marginally below) we call for an end to the multi-quarter EUR/USD decline.

    Key Quotes

    “Due to the following reasons:

    • The Fed is likely to be very sensitive to USD strength and any abrupt moves in USD higher is likely to cause a less hawkish Fed tightening cycle.

    • Similar to the German bund sell-off in 2Q15, we expect the EZ yields to experience a one-off sharp spike higher in 2H16 as the market will re-price the ECB monetary outlook (towards a less expansionary stance ).

    • EUR/USD at parity will be extremely undervalued, making it fundamentally difficult for the cross to depreciate further.

    • Current account dynamics (namely EZ current account surplus) matter.”
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