EUR/USD: Three key reasons for the underperformance – Goldman Sachs

Dhwani Mehta FXStreet

Analysts at Goldman Sachs highlight three main reasons for the recent underperformance of the euro against the US dollar.

Key quotes

“EUR/USD is down 1.6% against the majors since early September.”

“EUR/USD is just off fresh year-to-date lows.”

“Over that period, the single currency has underperformed all of our models, where the fundamentals point to some deterioration but not to this degree.”

“We think this underperformance is likely a combination of lower real rate differentials, equity hedging flows and a relative downgrade of European growth.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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