Credit Agricole CIB Research discusses the EUR outlook and sees the currency staying on the defensive in the near-term.
"The recent deterioration of the EUR outlook has coincided with the start of the second Covid-19 wave across the continent in September. Fears that the growing number of infections could force the ECB to introduce fresh easing measures later this year could keep the EUR on the defensive for now. We further note that the EUR has exhibited the strongest and statistically most significant correlation with the severity of the lockdown measures in the past," CACAIB notes.
"In turn, we expect the recent aggressive EUR jawboning by ECB policymakers to continue in the coming days with FX investors focusing in particular on President Christine Lagarde’s speech on 30 September," CACIB adds.