8 Nov 2013
Flash: EUR/USD dips below 1.33 post ECB surprise - Danske Bank
FXstreet.com (Barcelona) - Danske Bank analysts note that the surprise cut by the ECB took away the shine from EUR and EUR/USD dipped briefly below 1.33.
Key Quotes
“However, later in the evening it recovered somewhat now trading at 1.34 despite the poor performance of global risk markets yesterday afternoon. However, we doubt that EUR/USD will be able to stay at the current level the next couple of days and we still see modest downside here in November.”
“Our short-term financial model indicates that 1.33 is the fair level right now. Furthermore, yesterday’s rate cut, the ECB’s view that the inflation will stay low for a prolonged period and Fed tapering being a question of timing underline our long-held view that monetary policy in the US and the eurozone will be on a divergent path in 2014.”
“With the ECB cutting rates focus once again moves back to the Fed. Today's labour market report and Fed speeches will in that respect be scrutinised to judge when Fed tapering will start.”
Key Quotes
“However, later in the evening it recovered somewhat now trading at 1.34 despite the poor performance of global risk markets yesterday afternoon. However, we doubt that EUR/USD will be able to stay at the current level the next couple of days and we still see modest downside here in November.”
“Our short-term financial model indicates that 1.33 is the fair level right now. Furthermore, yesterday’s rate cut, the ECB’s view that the inflation will stay low for a prolonged period and Fed tapering being a question of timing underline our long-held view that monetary policy in the US and the eurozone will be on a divergent path in 2014.”
“With the ECB cutting rates focus once again moves back to the Fed. Today's labour market report and Fed speeches will in that respect be scrutinised to judge when Fed tapering will start.”