EUR/USD: What’s good for the Donald is good for the USD – Nordea
Strategists at Nordea continue to expect more downside pressure in the EUR/USD pair as the probability of Trump winning the election keeps rising, which is good for the US dollar.
“As long as the Democrats are busy obstructing each other, it seems as if Trump's tailwind has no limit. This is one simple reason why we continue to look for more downside in EUR/USD.”
“The EUR has been sold broadly as German key figures have had a smelly week. (...) Current EUR trends may though fuel speculation that Trump will punish the Euro area with auto tariffs. Timing couldn’t be any worse, if he opted for such over the coming quarters.”
“Maybe the EUR will be helped a little by the PMI print this week. Most analysts seem to conclude that the virus will push the PMI lower again, but shouldn’t we usually expect a lagged effect on Germany from Chinese key figures. Our market based model is getting increasingly upbeat – maybe risks are on the upside for the PMI print. We bet so.”