ECB’s assessment of EUR appreciation will be important - Nomura
|In view of analysts at Nomura, while the ECB is likely to announce its tapering plan in October, its assessment of EUR appreciation will be important for EUR.
Key Quotes
“As Mr. Cœuré said, the recent EUR appreciation is quicker than rate spreads suggest, and EUR sensitivity to rate spreads is at a historically high level. This means EUR appreciation is consistent with the direction of rate spreads, but the reaction may be amplified by “exogenous factors.” After the likely tapering announcement in October, market interest in ECB policy may decline, which could also lower EUR sensitivity to rate markets. Thus, an adjustment in the speed of EUR appreciation is possible, but we judge the direction of EUR is right. Another factor we need to consider is broader movement of financial conditions, which remains accommodative (and President Draghi said “they (financial conditions) remain broadly supportive of the non-financial companies and enterprises”). We thus judge there is further room for EUR appreciation, maintaining a bullish stance on EUR.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.