10 Dec 2013
Flash: EUR/USD would depend on the Fed – Danske Bank
FXstreet.com (Edinburgh) - According to Senior Analyst at Danske Bank Christin Tuxen, the recent hawkish tone from the ECB leaves the door open for further upside towards year-end.
Key Quotes
“We now expect to see US data and Fed as the key drivers of EUR/USD ahead of year end as the ECB will likely be considered sidelined until they, in our view, will be forced to react to weaker-than-expected inflation figures after New Year”.
“We emphasise that if our economists are right in projecting a euro-zone disinflation surprise to be delivered in January and if the ECB reacts to this with a deposit cut (to negative territory)… EUR will most certainly suffer as this would have a noticeable impact on EONIA rates and mark a significant change in stance with rates no longer mentally capped at the zero level”.
Key Quotes
“We now expect to see US data and Fed as the key drivers of EUR/USD ahead of year end as the ECB will likely be considered sidelined until they, in our view, will be forced to react to weaker-than-expected inflation figures after New Year”.
“We emphasise that if our economists are right in projecting a euro-zone disinflation surprise to be delivered in January and if the ECB reacts to this with a deposit cut (to negative territory)… EUR will most certainly suffer as this would have a noticeable impact on EONIA rates and mark a significant change in stance with rates no longer mentally capped at the zero level”.