Credit Agricole Research flags a scope for further EUR upside, and likes to express that via a long EUR/AUD position in spot targeting a move towards 1.76.
"The European Commission’s proposal for the EU recovery fund reinforced the burden sharing elements of the earlier Franco-German proposal and went beyond it in terms of overall size. We remain hopeful that the final version of the fiscal package approved by the EU heads of state in June would keep these positive features. The Eurozone stock and peripheral bond markets rallied in response to the proposal," CACIB notes.
"The EUR regained ground across the board and we expect the EUR to remain supported vs less liquid, risk-correlated currencies with exposure to China like the AUD and NZD," CACIB adds.