EUR: Well supported against major emerging markets – Rabobank

By FXStreet FXStreet (Delhi) – Research Team at Rabobank, suggest that the aggressive adjustment of EUR positions that dominated activity in August appears to have mostly run its course and EUR looks well supported against the major emerging market currencies.

Key Quotes

“While uncertainty connected with next week’s FOMC data suggests that volatility levels may increase again near-term, we see little risk of EUR/USD retesting last month’s highs in the coming weeks.”

“On a 3 to 6 mth view we expect EUR/USD to edge lower on the back of interest rate differentials on the assumption that the Fed hikes rates in December. While we expect the EUR to lose ground vs. the USD medium-term, we expect the EUR to retain a firmer tone against a host of other currencies.”

“In view of the dual uncertainties connected with Chinese growth and Fed policy is would still take a brave investor to move back into high risk currencies near-term. We therefore expect the EUR to remain well supported vs. many EM and commodity linked currencies. The USD and the GBP, however, are not high risk.”

“Although the slowdown in EM growth has impacted expectations regarding Fed and BoE interest rate policy, the same dynamic …read more

Source:: FX Street