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Jan 23 - 12:55 PM

EUR: We Look To Sell EUR/USD Rallies; AUD: We See Modest N-Term Upside Risks Vs USD, EUR - Danske

By eFXdata  —  Jan 23 - 10:45 AM

Danske Research discusses its current bias on EUR and AUD.

"While EUR/USD crept slightly higher towards the end of last week the pact of the move higher has clearly slowed with the cross still kept below the 1.09 mark. Looking ahead we think the cross should be traded as a derivative of 1) relative attractiveness of Eurozone assets and hence We Eurozone growth outlook and 2) the potential for a re-tightening of global financial conditions. We have 1.09 as our forecast for the cross in 1M but still reiterate that we think any move higher in the cross from current levels open up for attractive selling opportunities," Danske notes. 

"AUD/USD ended the week on a strong footing following the rebound in broader risk sentiment. Australia's weak employment data last week increased the probability of RBA pausing its hiking cycle already in the next meeting 7th of February. Market remains divided between a pause and a 25bp hike, and thus the Q4 inflation (due for release on Wednesday) will be the key data release to follow. We continue to see modest near-term upside risks to AUD vs. USD and EUR especially on the back of the Chinese reopening," Danske adds. 

Source:
Danske Research/Market Commentary

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