Strategy from Deutsche Bank
Recent developments in EUR/USD point to a renewed deterioration in fundamentals across our two most important guiding frameworks – flows and real rates.
, the basic balance – the sum of the current account, FDI and portfolio flows – remained negative but stable throughout last year as large portfolio outflows offset the current account. Flows have recently taken a turn for the worse however, this time driven by foreign direct investment (FDI) outflows. European appetite for foreign companies is picking up, and a similar message is given by our more forward-looking cross-border M&A monitor.
