By eFXdata — Nov 16 - 10:45 AM
Societe Generale sees a scope for EUR/USD to break 1.20 in the near-term.
"Vaccine optimism may be more straightforward in FX than rates, equities...For equity markets, the prospect of a Covid-19 vaccine being available at some point in 2021 isn't unambiguously good news. The Nasdaq is up by over 30% this year, thanks to Fed accommodation and the shift in spending patterns," SocGen notes.
"FX is the one market which can take a slightly longer view...In Europe, there lockdowns are going to be a significant drag on economic activity in Q4, but confidence about 2021 is more important. The continued tightening in peripheral yield spreads should continue to underpin the euro, and November's 1.1920 high may be the last obstacle before a new break of 1.20 is seen,' SocGen adds.
Société Générale Research/Market Commentary