Draghi’s disappointment sent the euro way up. Since then, the same Draghi did damage control, but the pair remains significantly higher than beforehand.
What’s next? The team at BNP Paribas sees this as an overreaction:
Here is their view, courtesy of eFXnews:
Despite the ongoing market disappointment with the extent of ECB action last week, the bottom line is that the ECB easing has been scaled up significantly and in subsequent remarks President Draghi strongly signalled readiness to do more if needed, argues BNP Paribas.
“With EUR overall positioning now very light (only -2 out of +/-50 according to BNP Paribas FX Positioning Analysis) we believe EURUSD will prove unsustainable at current levels,†BNPP adds.
BNPP expects the pair slip to 1.06 by year-end.
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