EUR/USD: stability is stocks is a downside play – BTMU
By FXStreet FXStreet (Guatemala) – Analysts at Bank of Tokyo Mitsubishi explained that the euro continues to remain stable against the US dollar in the near-term.
Key Quotes:
“The more dovish than expected comments from ECB President Draghi after today’s policy meeting are likely to weigh on the euro in the week ahead.”
“President Draghi clearly highlighted that downside risks have increased to the ECB’s inflation outlook. A clear signal was also provided that the ECB will weigh up the need for additional stimulus at their next meeting in March when the staff forecasts will be updated.”
“Another key determinant of euro direction in the week ahead will be global investor risk sentiment. If global investor risk sentiment remains fragile next week it should provide support for the euro and justify our neutral bias for EUR/USD.”
“However, if global equities begin to stabilize or rebound it would increase downside risks for EUR/USD in the near-term. We are also wary that the Fed will release a more dovish statement after their meeting next week which could weigh modestly on the US dollar, although the Fed is unlikely to be overly concerned by recent developments at this stage.”
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Source:: FX Street
