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EUR: Some Updated Analyst Comments on the Euro

EUR
USCEEMEABulletMarketsForeign Exchange BulletsNorth America
  • *ING: On an intra-day perspective, ING note the best chance of a EUR/USD move will be on the back of the US PCE data. The pair still looks quite oversold based on its 6-7% two-month drop, according to ING, which suggests any dip towards the 1.0400/0425 area today could be enough of a decline before any potential month-end rebalancing dollar sales emerge.
  • *SOCGEN: SocGen says EURUSD’s post 2020 correlation with 2y yield differentials remains very strong and today’s implied level is within 0.3% of the current spot rate. The market prices more/faster ECB rate cuts than SocGen do, but the debate about how low rates can get will bubble on. They believe the euro doesn’t ‘need’ to fall further, but from economic trends, to US trade policy and the geopolitical backdrop, there isn’t anything domestically, to push it back up. However, they indicate that EUR/JPY still has room to depreciate further.
  • *HSBC: Meanwhile, HSBC note French consumer confidence fell back to 90 in November (vs 94 consensus), with the unemployment outlook sub-component rising sharply to 42, well above the long-term average of 31. Labour market deterioration potentially signals a new phase for the deterioration of EZ data, highlighting that at 7.2% France’s unemployment rate is close to 42-year lows. ECB’s Schnabel professes that the eurozone isn’t headed for recession, but employment indicators question that judgement. HSBC expect EUR-USD to fall to 0.99 by end-2025.
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  • *ING: On an intra-day perspective, ING note the best chance of a EUR/USD move will be on the back of the US PCE data. The pair still looks quite oversold based on its 6-7% two-month drop, according to ING, which suggests any dip towards the 1.0400/0425 area today could be enough of a decline before any potential month-end rebalancing dollar sales emerge.
  • *SOCGEN: SocGen says EURUSD’s post 2020 correlation with 2y yield differentials remains very strong and today’s implied level is within 0.3% of the current spot rate. The market prices more/faster ECB rate cuts than SocGen do, but the debate about how low rates can get will bubble on. They believe the euro doesn’t ‘need’ to fall further, but from economic trends, to US trade policy and the geopolitical backdrop, there isn’t anything domestically, to push it back up. However, they indicate that EUR/JPY still has room to depreciate further.
  • *HSBC: Meanwhile, HSBC note French consumer confidence fell back to 90 in November (vs 94 consensus), with the unemployment outlook sub-component rising sharply to 42, well above the long-term average of 31. Labour market deterioration potentially signals a new phase for the deterioration of EZ data, highlighting that at 7.2% France’s unemployment rate is close to 42-year lows. ECB’s Schnabel professes that the eurozone isn’t headed for recession, but employment indicators question that judgement. HSBC expect EUR-USD to fall to 0.99 by end-2025.