EUR/USD: Comfortable with core long view - Nomura

Sandeep Kanihama FXStreet Contributor

The analysis team at Nomura remains comfortable with their core long EUR/USD view as the single currency continued to grind higher this week.

Key Quotes

“Interestingly, EUR/USD’s correlation with the long end of the rate spread has been increasing. Position adjustments around French political risks in FX and rates markets may explain part of this. However, as occurred after the US taper tantrum, the currency may become more highly correlated with the move in term premium as normalisation approaches.”

“We think ECB forward guidance will be more data-dependent and, as a result, EUR will be more sensitive to better euro area data. At the next meeting, we think the ECB is likely to take steps towards normalisation and EUR will likely trade strongly into the meeting.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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