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  • "We downgraded our Euro area baseline growth expectations for the next year by about 75bp, while also flagging the risk of a more severe downturn if gas flows from Russia are interrupted entirely. As a rule of thumb, a 75bp growth downgrade is typically worth about 1.5% on EUR/USD, so the moves this week are consistent with the market adjusting to this shifting outlook and putting some weight on the possibility of an even more significant growth impact. If the market were to move to pricing our severe downside scenario, it could push EUR/USD lower by another 5%,"GS notes.
  • "Overall, we see the risks tilted towards more downside over the coming weeks, particularly after the strong US employment report that should keep the Fed on the tightening path and somewhat reduce imminent recession concerns in the US," GS adds.


It does seem most likely that Russia will cut gas to Europe as part of its warmongering strategy:

Which would bring Goldman Sachs' "severe downside scenario" into play.

Much of the focus right now is on parity.

1.00 is a big round number for sure.

eurusd parity 12 July 2022