EUR/USD: Five reasons for the euro's decline – Citibank
|Analysts at Citigroup discuss the key five reasons for the euro’s recent decline to multi-year lows sub-1.0800 levels.
Key Quotes:
"Reasons for EUR's decline - (1) EU less US (hard) data momentum is turning negative; (2) Downward revisions to Chinese and global growth in the face of the COVID-19 outbreak to impact the euro zone more given supply chain linkages between Europe and China - a supply chain recovery remains problematic in the near term even if Coronavirus sentiment makes an immediate turn; (3) Foreign (Japanese and European) investor buying of US bonds FX unhedged; (4) A poor technical picture; (5) Rising political risks in Germany and Italy.
Bottom Line - Drivers 1, 2, 3 & 4 are interlinked and would likely recede if the Coronavirus outlook improves.”
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