Tuesday, September 13, 2011

Morgan Stanley on $EURUSD

Uncertainty in Europe has again increased, resulting in continued ECB participation in bondmarkets. This has seen the ECB balance sheet expanding, which is also EUR-negative over themedium term. Many traditional market indicators, such as our relative yield curve model, are alsogiving renewed EUR-negative signals. Overall, we expect EUR to come under further pressureand are currently rethinking our forecasts.

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