ECB unlikely to pressure EUR next week; buy dips and stay long - Credit Agricole

Credit Agricole on the euro

Credit Agricole CIB FX Strategy Research discusses the EUR outlook going into next week's ECB Meeting.

"In the week ahead, the main focus for investors will be Thursday's ECB policy announcement. We do not exclude the possibility that the central bank could upgrade both its growth and inflation outlooks. Given stable monetary policy expectations, we also believe flows will continue to drive the single currency.

In fact, we expect next week's December PMI releases to indicate further expanding business activity and such prospects should ensure growth expectations remain well supported. We continue to be in favour of buying the EUR, for instance against the USD and CHF," CACIB argues

In line with this view, CACIB maintains a long EUR/USD position from 1.1770 targeting 1.2200 and long EUR/CHF position* from 1.1320 targeting 1.1800.

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