EUR/USD wary on ECB and Catalonia – Danske Bank

Head of FI Research at Danske Bank Arne Rasmussen assessed the current scenario for the European currency.

Key Quotes

“EUR/USD still hovering around the 1.1750 level as we are awaiting today's ECB minutes. These could be decisive in setting market expectations for what QE announcement the ECB would do at the October meeting, but we deem that a hint the scheme will be extended into 2018 (as we look for) will not move the cross too much; partly because this seems to be largely what the market expects already, and partly because the FX market is likely to increasingly show fatigue to QE communication in any case”.

“Separately, keep an eye out for a tad more downside to EUR crosses if a Catalonian declaration of independence puts focus back on the recent clouds gathering across the euro-zone political scene. Also a stream of both ECB and Fed speakers to watch out for today”.