Analysts at Rabobank explained that over the past few weeks Greece has re-asserted itself both as a source of headlines and a potential negative factor for the EUR.
Key Quotes:
"We would argue, however, that the greatest pressure on the EUR in recent months has stemmed from ECB activity and from expectations of divergent policy action from the European central bank and the Federal Reserve this year."
"The accelerated pace of the falls in EUR/USD between mid-December and late January forced us and the market to re-think our forecasts for the currency pair through the remainder of the year. Some market participants have penciled in a drop to parity or beyond for EUR/USD."
"We would argue in favour of a more moderate pace of EUR depreciation in the coming months towards 1.10 on a 12 mth view. In spite of the forthcoming general election in the UK, the potential for further downside in EUR/GBP is one of our favoured currency plays for this year."
Key Quotes:
"We would argue, however, that the greatest pressure on the EUR in recent months has stemmed from ECB activity and from expectations of divergent policy action from the European central bank and the Federal Reserve this year."
"The accelerated pace of the falls in EUR/USD between mid-December and late January forced us and the market to re-think our forecasts for the currency pair through the remainder of the year. Some market participants have penciled in a drop to parity or beyond for EUR/USD."
"We would argue in favour of a more moderate pace of EUR depreciation in the coming months towards 1.10 on a 12 mth view. In spite of the forthcoming general election in the UK, the potential for further downside in EUR/GBP is one of our favoured currency plays for this year."
