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EUR/USD continues to ignore peripheral spreads - SG

FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Research at Societe Generale, notes that Euro followed the peripheral spreads faithfully previously but the relative interest rates no longer drive the currency.

Key Quotes

“Once upon a time, the Euro followed peripheral spreads faithfully, and tightening spreads were a catalyst for the Euro's rally from USD 1.2050 in mid-2012 to 1.3990 in May 2014.But no longer. Relative interest rates, and perhaps even more so, the ECB's negative interest rates, are the dominant driver. But it's worth keeping pretty tight stops on Euro shorts, as a push through EUR/USD 1.25 could see a bit of follow-through.”

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