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2 Apr 2014
EUR/USD resilient around 1.3800 - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, underlines the EUR/USD's stubbornness around the 1.3800 handle.
Key Quotes
"The EUR/USD rate remains well underpinned around the 1.3800 level and this may reflect one of two things – first that the market is convinced the ECB will not act on Thursday or second that the market is convinced the ECB will not do enough. We think the ECB does nothing but admit that this view is not held with any great conviction."
"The annual inflation rate stood at 0.8% when the ECB met in March and it now stands at 0.5%. The inflation projection for 2014 of 1.0% already looks in doubt."
"We would probably hold more conviction on the ECB not doing enough if they do decide to act this week. A refi rate cut only is possible and that would probably only have a modest impact on EUR/USD."
"Inaction or unconvincing action would risk EUR/USD testing the 1.4000 level over the coming weeks. We still do expect some greater action at some point in Q2."
Key Quotes
"The EUR/USD rate remains well underpinned around the 1.3800 level and this may reflect one of two things – first that the market is convinced the ECB will not act on Thursday or second that the market is convinced the ECB will not do enough. We think the ECB does nothing but admit that this view is not held with any great conviction."
"The annual inflation rate stood at 0.8% when the ECB met in March and it now stands at 0.5%. The inflation projection for 2014 of 1.0% already looks in doubt."
"We would probably hold more conviction on the ECB not doing enough if they do decide to act this week. A refi rate cut only is possible and that would probably only have a modest impact on EUR/USD."
"Inaction or unconvincing action would risk EUR/USD testing the 1.4000 level over the coming weeks. We still do expect some greater action at some point in Q2."