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ECB speakers continue to suppress EURUSD strength – BNP

FXStreet (Delhi) – Research Team at BNP Paribas, think that ECB’s push back against EUR strength and prospects for further easing remain a key hurdle to any upside in EURUSD and note dovish comments from governing council member Nowotny helped knock the currency lower on Thursday.

Key Quotes

“On Thursday we recommended fading EURUSD strength via a sell recommendation at 1.1450 with a 1.09 target and 1.1630 stop loss. While our STEER™ model is signalling EURUSD is already expensive at current levels of rate differentials we think those differentials are likely to move in favour of the dollar in Q4.”

“Our rates strategists argue the front end of the euro curve is failing to reflect the possibility of negative rates and have recommended a long position accordingly, while they also expect US front-end yields to rise into year-end.”

“Our base case is for ECB easing in December but October cannot be ruled out if data disappoints.”

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