Divergence will weigh on EUR for some time – Scotiabank

By FXStreet FXStreet (Guatemala) – Analysts at Scotiabank explained that the IMM data released yesterday showed net spec USD longs extended significantly for a fifth consecutive week to total USD44.6bn—the highest since March when EUR/USD reached a low of 1.0460 or so before bouncing.

Key Quotes:

Underlying the USD’s slippage is perhaps a growing concern among investors that the ECB is priced in now, as is the Fed more or less. We are less sure than the USD is near a peak and note that short‐term EUR/USD implied vols continue to push higher (1 week has gained another vol or so), suggesting that there is still a fair bit of uncertainty in the markets.

Diverging monetary policy will remain a restraint on a large EUR rebound for some time yet.”
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Source:: FX Street