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16 Jul 2015
EUR/USD to parity will do the heavy lifting for the EZ - TDS
FXStreet (Guatemala) - Ned Rumpeltin, European Head of Currency Strategy at TD Securities explained that in sum, there were no major surprises from the Governing Council.
Key Quotes:
"But they did make important changes to the statement and tone of the responses. Today was meant to be a verbal intervention to underpin the relative stability that was sustained in Euro markets during the recent crisis. If we and the ECB are wrong, however, and the economic surveys and hard data suggest a greater negative impact from recent volatility, we think the ECB could decide to frontload purchases even further in the fall."
"With the Fed on track to begin tightening in September, we think the ECB will instead be content a weaker euro doing the heavy lifting in providing easier financial conditions. If our core scenario is realized and EUR/USD challenges parity by year-end, renewed EUR weakness is likely to provide further support to the Eurozone’s recovery in growth and inflation."
Key Quotes:
"But they did make important changes to the statement and tone of the responses. Today was meant to be a verbal intervention to underpin the relative stability that was sustained in Euro markets during the recent crisis. If we and the ECB are wrong, however, and the economic surveys and hard data suggest a greater negative impact from recent volatility, we think the ECB could decide to frontload purchases even further in the fall."
"With the Fed on track to begin tightening in September, we think the ECB will instead be content a weaker euro doing the heavy lifting in providing easier financial conditions. If our core scenario is realized and EUR/USD challenges parity by year-end, renewed EUR weakness is likely to provide further support to the Eurozone’s recovery in growth and inflation."