EUR/USD is likely to move below parity - Nomura

Analysts ar Nomura explained that EUR/USD is likely to move below parity.

Key Quotes:

"The inverse correlation of the EUR to the DAX (or other EUR risk measures) has probably been the most frustrating relationship for EUR bears.

Whenever euro area woes come to the surface, European asset markets sell off, but the euro starts to rally.

However, this negative correlation has been trending less negative, increasing scope for political risk next year to weaken euro. We believe the US yield advantage is now sufficient to maintain a EUR downtrend, even if it reverses moderately, and positioning is less of an issue this time.

We believe a move below parity is certainly possible."