EUR/USD: Parity this year, not possible – ING

By FXStreet Research Team at ING, suggests that the soft Chinese economic data is stoking fears of a hard landing, reinforcing global risk aversion and weighing heavily on stocks, commodity prices, and vulnerable EM currencies.

Key Quotes

“But on top of further monetary easing by major central banks, or a delay in tightening by the Fed, Chinese fiscal policy may stabilise the macro-economy and markets. However, this may not be evident until mid-year, and we do not hold our breath for a strong rebound.

US growth has shown a marked slowdown. And if this is a genuine loss of momentum, and not just one of those periodic ‘soft patches’ the US experiences, then it is not inconceivable that the US could slide back into recession. Even if this is nothing more than a slowdown, the odds against further tightening of policy in 2016 are growing, and we have reduced our Fed funds forecast from two hikes to one this year, and will be closely monitoring to see if we need to revise further.

Mario Draghi has hinted that more stimulus could be on its way from the European Central Bank (ECB). Recent activity data has shown that the Eurozone is not immune to financial market …read more

Source:: FX Street