Forex Flash: EUR/USD on track to 1.40 before 2,000 pips drop by year-end - Societe Generale

FXstreet.com (Barcelona) - With relative interest rates and peripheral bond spreads all moving sharply in the Euro's favour in January, this effect "may continue to send the EUR/USD higher, to 1.40 or so" says Kit Juckes, Head of FX at Societe Generale.

However, Mr. Juckes adds: "That doesn't alter a view that the Euro will weaken to USD1.20 by the end of 2013 as EU/US economic divergence increases. A strong Euro may reflect trends in the currency's fundamental drivers, but it will increase economic divergence within Europe and force a horribly painful adjustment on less competitive economies."

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