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Forex Flash: EUR/USD: Further ECB easing will no long be positive for the Euro - Danske Bank

By FXstreet.com,  March 16, 2012, 07:06:00 AM EDT

FXstreet.com (Córdoba) - The rise in US yields and the less-dovish Fed communication has so far not lead to a significant move lower in EUR/USD this week, according to the Danske Research team. "We expect this to continue - keeping our 3M EUR/USD forecast at 1.32 - but acknowledge the risk from relative monetary policy".

So far, ECB easing has been EUR positive as the narrowing of European sovereign spreads has dominated the currency negatives from a bigger central bank balance sheet, says Danske. "However, following the second 3Y LTRO we have likely moved to the point where further ECB easing will no long be EUR positive, as the potential for tighter credit spreads has become more exhausted".




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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