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Danske Bank Eye Another Test Of $1.20

EURO-DOLLAR

In the wake of last week's ECB rhetoric Danske Bank note that the impact of "verbal intervention in FX is rarely very persistent (see prev. episodes in EUR/HUF, CHF, TRY). Given that we do not expect a policy change from the ECB, we like to fade the effects of such verbal intervention. Note: (1) we think the FX impact on euro area inflation is low, (2) the global trend of a synchronised recovery is likely to continue (3) next week we look for further dovish action from the Fed. These points remain in favour of a renewed test of $1.20 in EUR/USD near term."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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