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Jul 20 - 06:55 PM

EUR/USD: Short-Term Fair-Value Can Drop From 1.05 To 0.96 On Energy Crisis - Credit Agricole

By eFXdata  —  Jul 20 - 03:00 PM

Credit Agricole CIB Research discusses EUR/USD short-term fair-value. 

"We assess the impact of the brewing energy crisis in Europe on the short-term EUR/USD outlook, using our FAST FX fair value model. To this end, we make assumptions about the EUR-USD short-term rate spread, peripheral yield spread to Bunds and other FX drivers," CACIB notes.

"We conclude that the EUR/USD short-term fair value can drop towards 0.96 from c.1.05 at present, if the energy crisis in Europe cuts short the ECB’s tightening cycle from here while triggering a renewed turmoil in the Eurozone periphery," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary

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