When it comes to the EUR we remain of the view that the currency is likely to continue losing its safe haven appeal in the current environment.
Both intact growth uncertainty as related to Asia and well supported Fed rate expectations should prevent commodities from correcting considerably higher. Capped commodity price developments, the single currency around the current levels and still muted growth conditions should keep inflation subject to downside risk.
All of the above should keep the EUR a sell on rallies, in particular against the USD.
It must be noted too that according to IMM data speculative positioning is closer to balanced territory. Accordingly position squaring related upside risk should be limited from the current levels.
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