22 Dec 2014
Euro displaying renewed weakness - BTMU
FXStreet (Barcelona) - According to Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, the prospect of more aggressive monetary easing from the ECB and the beginning of Fed’s rate hike in 2015 has led the renewed euro weakness.
Key Quotes
"The euro is displaying renewed weakness as the prospect of more aggressive monetary easing from the ECB in the year ahead stands in marked contrast with the beginning of rate hikes from the Fed. The BoE could even join the Fed in beginning to raise rates later next year if there is another strong year of economic growth which tightens further the labour market and results in stronger earnings growth as well, which should help keep downward pressure on EUR/GBP in 2015."
"There is already evidence that the tentative pick up in earnings growth in the second half of this year combined with the sharp decline in the price of crude oil are beginning to boost personal consumption growth posing upside risks to economic growth in 2015.”
“The CBI distributive trades survey released on Friday revealed that the volume of sales increased to +61 in December from +27 in November reaching their highest level since January 1988. It follows the release earlier last week of the stronger than expected retail sales report for November. Companies displayed more confidence in their plans to hire more permanent staff take on more graduates, young people, and apprentices. “
"The euro also faces the prospect of heightened political risk again in 2015 which could at times weigh on the euro. A snap general election could take place in Greece early next year if the government fails to secure parliamentary support for their presidential candidate Stavros Dimas before year-end."
Key Quotes
"The euro is displaying renewed weakness as the prospect of more aggressive monetary easing from the ECB in the year ahead stands in marked contrast with the beginning of rate hikes from the Fed. The BoE could even join the Fed in beginning to raise rates later next year if there is another strong year of economic growth which tightens further the labour market and results in stronger earnings growth as well, which should help keep downward pressure on EUR/GBP in 2015."
"There is already evidence that the tentative pick up in earnings growth in the second half of this year combined with the sharp decline in the price of crude oil are beginning to boost personal consumption growth posing upside risks to economic growth in 2015.”
“The CBI distributive trades survey released on Friday revealed that the volume of sales increased to +61 in December from +27 in November reaching their highest level since January 1988. It follows the release earlier last week of the stronger than expected retail sales report for November. Companies displayed more confidence in their plans to hire more permanent staff take on more graduates, young people, and apprentices. “
"The euro also faces the prospect of heightened political risk again in 2015 which could at times weigh on the euro. A snap general election could take place in Greece early next year if the government fails to secure parliamentary support for their presidential candidate Stavros Dimas before year-end."