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Forex pairs in this Article » EUR/USD (New York) - Recent Fed exit policy talk also got the ECB fretting over a steeper yield curve, notes Corporate Treasury Lee McDarby at Investec.

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Accordingly, “the ECB took a 180 degree U-turn on its ‘never pre-committing’ with Mario Draghi stating in July that the Governing Council expects key ECB rates to remain at present levels or lower for an ‘extended period of time’.”

“Whilst this guidance provided some clarity on the monetary policy backdrop, political tensions remain a source of uncertainty, with Greece currently top of the agenda - it looks at risk again of restructurings or bailout III.”

“We note that Portugal’s exit from its bailout in mid-2014 also looks vulnerable at present, despite recent reassurances from President Anibal Cavaco Silva that the country is not heading to snap elections, following the failure of the opposition and government to unite in a ‘national salvation’ pact. Even so, despite the air of nervousness and uncertainty, we see few causes to alter our EUR/USD projections ($1.27 end-13 and $1.22 end-14).”
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