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Jul 18 - 09:55 AM

EUR/USD: Staying Bearish And Short; A 50bps Hike From The ECB Would Be A Major Risk This Week - MUFG

By eFXdata  —  Jul 18 - 09:30 AM

MUFG Research discusses the EUR outlook into this week's ECB meeting. MUFG is short EUR/USD in its ToTW portfolio targeting a move towards 0.9760.

"We maintain a bearish outlook for the EUR, and a short EUR/USD trade position. The main upside risk to our trade idea in the week ahead would be if the ECB delivers more front-landed tightening by hiking rates by 50bps, and the ECB’s anti-fragmentation policy tool plans are viewed favourably by market participants," MUFG notes. 

"In contrast, if the ECB’s anti-fragmentation policy tool plans disappoint and/or Italy moves closer to an early election, the fundamental case for a weaker EUR would be reinforced," MUFG adds. 

Source:
MUFG Research/Market Commentary

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