8 Mar 2016
EUR/USD range likely to prevail after ECB - SocGen
Research Team at Societe Generale, suggests that the EUR/USD risk is asymmetric, with more room for a bounce in case of ECB disappointment.
Key Quotes
“ECB President Mario Draghi could maintain a strong bearish bias and succeed in pushing EUR rates and the exchange rate lower. But he is very unlikely to deliver policy action that is bold enough to send the EUR/USD below the 13y low of 1.0450 shortly.
If the market ultimately perceives the meeting outcome as really dovish, the short-term downside would be limited to the 1.07 YTD low. On the other side, the ECB is unlikely to massively disappoint the market to such an extent that the euro would break above the 2015 high of 1.16.”
Key Quotes
“ECB President Mario Draghi could maintain a strong bearish bias and succeed in pushing EUR rates and the exchange rate lower. But he is very unlikely to deliver policy action that is bold enough to send the EUR/USD below the 13y low of 1.0450 shortly.
If the market ultimately perceives the meeting outcome as really dovish, the short-term downside would be limited to the 1.07 YTD low. On the other side, the ECB is unlikely to massively disappoint the market to such an extent that the euro would break above the 2015 high of 1.16.”