Credit Agricole on the euro
Credit Agricole CIB Research discusses EUR outlook and maintains a cautious bias in the near-term, while staying bullish on the single currency in the long term.
"We believe that the single currency should benefit from a continuing recovery of global trade as the Eurozone exporters convert their USD proceeds into their home currency. In addition, global central banks will continue to diversify their growing FX reserves that are boosted by the recovery of the USD-denominated global trade flows," CACIB notes.
"In our view, the EUR vulnerable to two key risks in the near-term. The first is the risk of Eurozone data disappointments with today's Eurozone investor confidence and tomorrow's German ZEW likely to be main event on the calendar for the FX investors. In addition, the EUR could behave more like a risk-correlated currency and thus remain vulnerable to any potential deterioration in risk sentiment on a renewed spike in UST yields," CACIB adds.
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