The EUR has been taking a beating from the GBP over the past few weeks – and more recently from the USD too. It seems the reasons for expecting EUR weakness continues to build.
On the virus front, the under-performance of the vaccine roll out as well as rising virus cases is a point of concern. Growth expectations have been downgraded – and as more and more lockdown restrictions come online in the EU, the odds of further downgrades are rising.
From a monetary policy point of view, the ECB is far behind in terms of market expectations with the BOC & RBNZ expected to taper asset purchases sometime this year. Meanwhile, the FED and BOE are both taking a more sanguine approach to rising bond yields and faster policy normalisation expectations.
This week, the two focus points for the EUR will be incoming flash PMI data for March, as well as cross asset class considerations, such as US10Y and the subsequent impact on the USD.
Highlights of the video:
00:22 – Current Baseline
04:47 – Baseline expectations for the upcoming week
06:52 – Sentiment Shifts & Trade Plan