EUR well-supported by weak USD – Danske Bank

The sell-off in the US dollar accelerated yesterday following Mnuchin's 'weak USD comments' and Trump's protectionistic step against China, notes Senior Analyst, Morten Helt at Danske Bank.

Key Quotes

“A more protectionist and isolated US will always tend to be USD negative and Mnuchin's comments add to the weak USD policy the Trump administration has been pursuing ever since Trump's inauguration. Hence, EUR/USD now has support from both legs, and even if Draghi today makes an attempt to damp exit expectations and limit the pace of the euro rebound, we doubt it will lead to anything but a short -lived dip in the cross. In order to see a wider EUR sell-off we need to see FX moves mentioned in the ECB intro statement (not our base case).”