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2 Apr 2014
EUR/USD to see a step-wise decline into the low 1.30s - JPMorgan
FXStreet (Bali) - EUR/USD should follow a step-wise decline into the low 1.30s by the end of this year, notes the FX Team at JPMorgan.
Key Quotes
EUR/USD should see a decline because the likely move higher in US front-end rates (to 0.8% on the US 2-yr by December) is sufficient to overwhelm Europe's current account surplus."
"ECB policy is just a wildcard which might hasten the move; the base case is that the ECB makes no meaningful adjustments to policy this year. (Neither cutting the refi to 0%, ending SMP sterlisation, launching another LTRO or funding an ABS program are meaningful policies judged by their impact on aggregate liquidity and therefore money market rates.)"
Key Quotes
EUR/USD should see a decline because the likely move higher in US front-end rates (to 0.8% on the US 2-yr by December) is sufficient to overwhelm Europe's current account surplus."
"ECB policy is just a wildcard which might hasten the move; the base case is that the ECB makes no meaningful adjustments to policy this year. (Neither cutting the refi to 0%, ending SMP sterlisation, launching another LTRO or funding an ABS program are meaningful policies judged by their impact on aggregate liquidity and therefore money market rates.)"