G10 FX reactions to euro area inflation surprises - Nomura

By FXstreet.com | August 12, 2014 AAA

FXStreet (Łódź) - Nomura FX Strategists Yujiro Goto and Jordan Rochester point out that Eurozone inflation data has become increasingly important for the G10 FX market in recent months.



Key quotes

"We expect EUR to continue to trade weakly, as inflation pressure in the euro area is expected to stay subdued."



"Our analysis of FX reactions to euro area inflation surprises suggest USD and dollar bloc currencies would be the better G10 currencies to go long against EUR while euro area inflation momentum is weak."



"Fundamentally, we prefer to short EUR/USD."



"Of the European G10 currencies, GBP has the most room to appreciate against EUR, as GBP reacts very strongly to strong UK data, although it may not benefit much from weak euro area data."



"NOK and SEK can benefit from weaker European inflation and economic data, but we need to be more careful about the spillover effects of euro area disinflation."



comments powered by Disqus
Related Forex Analysis
  1. EUR/USD keeps the 1.2650 area
    Forex News

    EUR/USD keeps the 1.2650 area

  2. SEB: EUR/USD temporary bounce from support - eFXnews
    Forex News

    SEB: EUR/USD temporary bounce from support - eFXnews

  3. US yields may soon be on the rise again - BTMU
    Forex News

    US yields may soon be on the rise again - BTMU

  4. Credit Agricole: EUR/USD sensitivity to risk appetite could return - eFXnews
    Forex News

    Credit Agricole: EUR/USD sensitivity to risk appetite could return - eFXnews

  5. EUR/USD Continues to Meander
    Investing

    EUR/USD Continues to Meander

Trading Center