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EUR relief rally as euro-zone economy avoids recession - BTMU

FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the euro has staged a modest relief rally since the end of last week with EUR/USD rising back above the 1.2500-level.

Key Quotes

"On a trade-weighted basis the euro has stabilized over the last couple of months having failed earlier this month to break below the low from late September."

"At the margin the release of the euro-zone GDP reports for Q3 have provided some support for the euro revealing that the euro-zone economy avoided falling into technical recession as some had feared."

"The pick-up in growth in the euro-zone, if confirmed in Q4, may allow of the ECB more breathing room to assess the impact of their recent easing measures reducing the likelihood of further easing measures being implemented before year end."

"The euro may continue to remain more stable in the near-term without a fresh catalyst to trigger renewed selling pressures."

"There is also the risk that the euro relief rally could extend further in the near-term given elevated short speculative positioning."

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