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13 Mar 2015
EUR/USD forecast: below parity by year-end – ANZ
FXStreet (Barcelona) - According to ANZ, ECB’s policy and the negative interest rates might drag the EUR lower to 0.95 by 2015-end against the dollar.
Key Quotes
“Under low and negative interest rates, which are increasingly spreading across the duration of the curve, foreign capital inflows to the euro area fixed income markets have reversed.”
“In the absence of a monetary anchor and continued negative interest rates, the devaluation of the single currency will continue.”
“We have long been very constructive on the economic outlook for the euro area. But the ECB’s monetary settings remain toxic for the currency and until that changes – or guidance about them changes – the EUR is vulnerable to further losses.”
“As a result, we are now forecasting EUR to head through parity, and we change our year-end 2015 forecast for EUR/USD to 0.95 (from 1.15 previously).”
Key Quotes
“Under low and negative interest rates, which are increasingly spreading across the duration of the curve, foreign capital inflows to the euro area fixed income markets have reversed.”
“In the absence of a monetary anchor and continued negative interest rates, the devaluation of the single currency will continue.”
“We have long been very constructive on the economic outlook for the euro area. But the ECB’s monetary settings remain toxic for the currency and until that changes – or guidance about them changes – the EUR is vulnerable to further losses.”
“As a result, we are now forecasting EUR to head through parity, and we change our year-end 2015 forecast for EUR/USD to 0.95 (from 1.15 previously).”