Goldman Sachs maintains a bullish bias on EUR over the medium-term (6-12 months).
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- "A key component of our medium-term bullish outlook is that a structural change in monetary policy will help attract private sector investors again, which would help reverse the EUR 3tn in fixed income outflows since the start of the negative rate era. But if the ECB moves slowly over fears of creating stress in sovereign bond markets, risk-free rates may remain moderate for a longer period," GS notes.
- "We still think the ECB's relatively cautious approach is more likely to delay rather than derail the Euro's recovery, but it is worth keeping in mind that we do need monetary policy to step back a bit for our thesis to play out," GS adds.
EUR got cheaper on Tuesday: