TD Research maintains a structural bearish bias on the EUR over the coming months.
"We analyze how currencies have responded to government reactions to the outbreak, highlighting that these measures explain about a third of the price action the past three months. A less stringent response has been a boon, which also dovetails with mobility data. That has benefited currencies in Asia but also SEK. The EUR looks like the next shoe to drop, reflecting both growth and political economy fragmentation," TD notes.
"The EUR tells an interesting story. Its response index (GDP-weighted of EZ countries) has been one of the stronger in the sample, and yet the EUR has outperformed. The Citymapper data also shows relatively low mobility across the major European cities (the average is also quite weak against the sample). Part of these fits with our EUR outlook, which we think leaves it vulnerable to a deeper correction in the next few months," TD adds.