EUR/USD focus stays on US politics – Danske Bank
|Analysts at Danske Bank Aila Mihr assessed the recent price action around the pair.
Key Quotes
“CHF was the beneficiary last week, i.e. the only G10 currency that has strengthened against the euro. In our view, this suggests that the political turmoil in the US last week has been key in explaining the rise in EUR/USD”.
“If this was a story about a eurozone economic rebound and ECB exit from unconventional policies getting close, we would not expect to see CHF perform like this (EUR/CHF should be on the rise on any firm signs the ECB will look to lift rates and thus ease the pressure on SNB to keep EUR/CHF up)”.
“Going forward, this suggests that while EUR/USD will be sensitive to relative monetary policy stances, US politics is currently a key driver as well; should Trump manage to rein in the current pressure on his presidency, this would be key in stabilising the pair”.
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