First appeared on eFXplus on Sep 26 - 12:00 PM
Societe Generale Research discusses EUR outlook and highlights the current pattern of small monthly moves.
"In the meantime, the main overnight news was, perhaps, the resignation of Sabine Lautenshlager from the ECB Executive Board. She is the third German to have resigned since the end of the financial crisis, reportedly in response to the ECB's adoption of ever more unorthodox (dovish) policies. At one level, this highlights the limits to further easing, though the resignations of Axel Weber and Jurgen Stark in 2011 didn't prevent Mr Draghi's push for ever more unconventional policies in the next few years," SocGen adds.
"With the German economy sliding into recession, the need for fiscal easing seems clear, the near-term likelihood of tis happening seems equally remote. Absent a fiscal policy reaction, we can't see the EUR/USD pattern changing, as it trundles lower in a reasonably well-defined channel. Unless EUR/USD rallies in the next few days, September will make it 8 months of 9 this year when EUR/USD has fallen, and yet the total move is only 4 ½%," SocGen adds.
Société Générale Research/Market Commentary