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Feb 12 - 01:24 PM
EUR/USD: Further Correction Likely N-Term As European Investors Left 'Over-Hedged' - Barclays
First appeared on eFXplus on Feb 12 - 11:11 AM

Barclays Capital Research discusses EUR/USD this week and thinks that further risk reduction should continue to weigh on the pair.

"Investors seem most heavily positioned in growth-sensitive currencies, including the EUR funded with safe-haven currencies. The sell-off in US equities has likely left European investors over-hedged on their EURUSD exposure, with the ones undertaking more active rebalancing having to buy the USD back. Moreover, German political risks remain, in our view," Barclays argues. 

"This week, ECB speakers are unlikely to provide new information on the likely path of ECB policy, in our view. On the data front, we expect German GDP growth (Wednesday) to stabilize at 0.7% q/q in Q4 17 and EA Q4 17 GDP to be confirmed at 0.6% q/q (both Wednesday)," Barclays adds.

Barclays Research