A snippet from TD on the euro. Asking if parity will provide some, 'solid', support for EUR/USD.
While we expect some defence at this level, EUR/USD may not escape a sub-parity paradigm and 0.85/0.90 could soon become reality.
TD cite:
- It is too much to ask for capital flows to offset the erosion in trade, leaving EUR's much-heralded current account a drag for the currency.
- EUR/USD is following a similar profile to the last Fed cycle, suggesting more EUR downside to be had.
- Relative curve pricing and equity performance keep the prospects of EUR upside remote.
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TD not picking a bottom for this trend:
