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Jul 06 - 12:55 PM

EUR: Running On Empty; S/T Fair-Value Around 1.05-1.06 But Scope To Slide Towards Parity - Credit Agricole

By eFXdata  —  Jul 06 - 11:00 AM

Credit Agricole CIB Research discusses the EUR outlook and sees a scope for EUR/USD to slide towards parity in the near-term.

"Our results suggest that the EUR/USD fair value consistent with the short-term financial market fundamentals of EUR/USD is closer to 1.05-1.06. In the very near term, the EUR should continue to take its cue from the performance of the beleaguered Eurozone stock markets," CACIB notes. 

EUR/USD could further remain vulnerable because the USD continues to benefit from its role as a high-yielding safe-haven especially given that the US economy is still seen as relatively unscathed by the energy crisis that has engulfed Europe. We think, however, that for EUR/USD to extend its slide towards parity we would have to see rates markets paring back their ECB rate hike expectations and/or peripheral fragmentation risks creeping back in," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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