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FXStreet (Bali) - Eastern Europe contagion fears may cap the upside in the EUR, according to Greg Gibbs, FX Strategist at RBS.

Key Quotes

"The EUR may have shown the slightest hint of contagion from Eastern European political and economic troubles, possibly contributing to a fallback in the Eurozone manufacturing PMI flash in February."

"Periphery bond yields have lifted modestly in recent sessions, albeit from recent low levels. And the EUR yield spread over the US has fallen back modestly, to be near the lows in some months."

"While the EUR has resisted the pull of lower yield spreads since Q3 last year, they may help cap the upside in EUR."
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