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24 Dec 2014
EUR/USD downside pressure mounting
FXStreet (Guatemala) - EUR/USD is trading at 1.2190, up 0.15% on the day, having posted a daily high at 1.2221 and low at 1.2167.
Us yields have sky rocketed due to the robustness in US data in the form of the GDP and highest growth since 2003. Analysts at TD Securities noted that the US 2-year bond yields at 0.73/0.74% reflect the highest returns at this point on the curve since 2011 and the widest (most USD-supportive) EZ-US spreads since early 2007; “This helped push the EUR/USD exchange rate to the lowest in two years”.
“Contrasting growth and policy prospects keep EURUSD on track for a retest of the 2012 EZ Sovereign crisis low of 1.2047 sooner rather than later but we rather suspect that the contrasting EZ-US growth and policy outlooks means that there is substantially more downside risk for EUR/USD than that in the months ahead. Look to sell modest EUR/USD rallies from here”.
Us yields have sky rocketed due to the robustness in US data in the form of the GDP and highest growth since 2003. Analysts at TD Securities noted that the US 2-year bond yields at 0.73/0.74% reflect the highest returns at this point on the curve since 2011 and the widest (most USD-supportive) EZ-US spreads since early 2007; “This helped push the EUR/USD exchange rate to the lowest in two years”.
“Contrasting growth and policy prospects keep EURUSD on track for a retest of the 2012 EZ Sovereign crisis low of 1.2047 sooner rather than later but we rather suspect that the contrasting EZ-US growth and policy outlooks means that there is substantially more downside risk for EUR/USD than that in the months ahead. Look to sell modest EUR/USD rallies from here”.