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- EUR: ECB talk is cheap; EUR/USD dips a buy once the correction in longs has run its course - Credit Agricole
EUR: ECB talk is cheap; EUR/USD dips a buy once the correction in longs has run its course - Credit Agricole
eFXdata reports that Credit Agricole CIB Research discusses its expectations for ECB policy meeting.
"The latest correction lower in the EUR has been broad-based and seems driven by profit-taking by FX investors who have amassed record longs in the single currency of late according to our positioning data.
We believe that President Christine Lagarde may emphasize the ECB’s ability to ease aggressively further if needed. Moreover, ahead of the September meeting, the ECB’s chief economist has signalled that EUR/USD ‘matters’ while media reports have suggested that several Governing Council members worry about the impact of the resurgent EUR on the Eurozone’s exports and inflation," CACIB notes.
"We therefore think that Madame Lagarde may jawbone the EUR and fuel FX volatility this week. We doubt that this can trigger a sustainable EUR downtrend, however, in the absence of further policy rate cuts. The EUR therefore could become an interesting buy on dips once the correction of the market longs has run its course," CACIB adds.
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