FXStreet (Edinburgh) – Derek Halpenny, European Head of GMR at BTMU, believes the pair could slip below the parity level towards the end of 2015.
Key Quotes
“We are not too concerned that a deal between Greece and Brussels will threaten our call of a breach of parity later this year”.
“Greece has not been a notable factor in EUR/USD direction”.
“We would perhaps describe it currently as “noise” surrounding the key driver of relative monetary policy divergence”.
“Indeed, we sensed an interest amongst speculators to sell EUR/USD close to the 1.1500 level but were put off due to fears of a deal on Greece triggering a further squeeze to the upside”.
“Based on the above we are maintaining our view of EUR/USD falling to 1.0600 at the end of Q2 and to below parity at the end of the year”.
“The ECB is set to increase the pace of QE debt buying in June according to ECB Executive Board member Couere and that should help stabilize yields”.
“The key though is rate spreads between the US and the euro-zone and they are set to re-widen as the first Fed rate increase comes into sight, placing renewed downward pressure on EUR/USD”.
(Market News Provided by FXstreet)