EUR/USD managed to stabilize and gain some ground, but never went too far. What’s next?
Here is their view, courtesy of eFXdata:
MUFG Research discusses EUR/USD outlook and maintains a slightly bearish bias but thinks that any near-term downside will like be limited ahead of 1.1450.
“While it is still early days, the price action is supportive of our view that the scope for further euro weakness is likely more limited from current undervalued levels.
The euro also shares many similar characteristics with other safe haven currencies like the yen and Swiss franc which could help it to outperform during more risk-averse periods too. The ECB’s strengthened forward guidance could strengthen its appeal as a funding currency. The euro-zone is also recording a sizeable and widening current account surplus.
The recent strengthening of the euro may reflect as well some easing of concerns over slowing euro-zone growth in the near-term,†MUFG argues.
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