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Sep 02 - 07:55 AM

EUR/USD - COMMENT-U.S. Bank Maintains Its Bullish EUR/USD View

By Richard Pace  —  Sep 02 - 05:40 AM

Despite the EUR/USD setback from two-year highs at 1.2014 Tuesday, JP Morgan maintains its view from Aug.
24 nL1N2FQ09Q that EUR/USD will be comfortably above 1.2000 by autumn and perhaps 1.2500 by the end of the year.

In a daily note to clients Wednesday, JP Morgan notes the reaction to European Central Bank economist Philip Lane's comments (ECB does not target an FX rate, but certainly cares about it), but say it's not a cause for great alarm, although it could leave dealers on the defensive before next week's monetary policy meeting.

The note also mentions the bank's concerns about euro zone inflation undershooting even more than the United States', and that perhaps this deserves more attention, given the recent move in the currency.

However, while the bank has tactically reduced near-term conviction and recognises that the near term feels uncertain, it still feels USD weakness will persists medium-term and will look to rebuild a bullish EUR/USD view sooner rather than later.

Option markets send near-term warnings nL1N2FZ07R

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Source:
Refinitiv IFR Research/Market Commentary

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