MUFG Research sees a scope for cross-border flows to provide support for the EUR in the medium-term.
"Euro-zone investors purchased EUR 24.5bn worth of long-term debt in March, the smallest foreign bond purchase since September last year. Similar to our USD FX View thesis above on the unsustainability of foreign investor US equity inflow, the reverse of that is evident in the BoP data. Euro-zone investor purchases of foreign equities are currently at a record on a 12mth basis – EUR 316bn in March," MUFG notes.
"Overall, we see the cross-border flow picture for the euro-zone turning more favourable in the coming months that will add to building EUR support," MUFG adds,