We use third-party cookies to enhance website's user experience and to display personalized advertising.
By using our website, we consider you accept our Cookie Policy.
 03/18/2019 19:49
Beta: fxmania is still in 'Beta'. We want your input so please send us feedback.
Forex Analysis

03/05/2015 08:42:13

EUR/USD downtrend should continue: market has yet to re-price the Fed

EUR/USD will fall while the euro area is still in deflation

DANSKE BANK. The EUR is falling like a stone, particularly against the USD. We think this move has further legs.

It appears that rising FX hedge ratios from real money investors into EUR assets are driving this latest move. When European equities rise, real money investors have to sell more EUR to maintain an unchanged FX hedge ratio. This combined with increased lending abroad from European banks resembles what we have seen in Japan in recent years. In our view, the EUR/USD downtrend should continue as long as the market has yet to re-price the Fed and the euro area is still in deflation.


▸ Forex Analysis

Currency Converter
Economic Calendar