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2 Jan 2015
EUR falls to 4.5yr low, breaking below 1.2043 (2012 low) – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank shares that EUR fell to a 4.5yr low, breaking below 1.2043 (2012 low), on soft PMIs & Draghi’s comments that price stability risks have increased, and anticipates the pair to head towards 1.1800 levels towards 2015-end.
Key Quotes
“EUR is weak, having lost a further 0.5% since the close of 2014; breaking below the July 2012 low of 1.2043; opening up the next level of resistance at 1.1877, the 2010 low. The combination of soft PMI data and dovish comments by ECB President Draghi have weighted heavily on the currency.”
“The final December Eurozone manufacturing PMI came in at 50.6, still in expansion and above the November dip to 50.1, but disappointing the expectation for 50.8. In addition, ECB President Draghi commented in Germany’s Handelsblatt that “the risk that we don’t fulfill our mandate of price stability is higher than it was six months ago”, highlighting once again that the ECB is in technical preparations to alter the size, speed and composition of its current asset buying program.”
“The next ECB meeting is January 22nd and there is already building anticipation as to the action the central bank is likely to take.”
“We expect EUR to trend lower throughout 2015 and hold a year‐end target of 1.1800.”
Key Quotes
“EUR is weak, having lost a further 0.5% since the close of 2014; breaking below the July 2012 low of 1.2043; opening up the next level of resistance at 1.1877, the 2010 low. The combination of soft PMI data and dovish comments by ECB President Draghi have weighted heavily on the currency.”
“The final December Eurozone manufacturing PMI came in at 50.6, still in expansion and above the November dip to 50.1, but disappointing the expectation for 50.8. In addition, ECB President Draghi commented in Germany’s Handelsblatt that “the risk that we don’t fulfill our mandate of price stability is higher than it was six months ago”, highlighting once again that the ECB is in technical preparations to alter the size, speed and composition of its current asset buying program.”
“The next ECB meeting is January 22nd and there is already building anticipation as to the action the central bank is likely to take.”
“We expect EUR to trend lower throughout 2015 and hold a year‐end target of 1.1800.”