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14 Feb 2013
Forex Flash: Euro could see further weakness - Wells Fargo
The euro fell on Thursday and is among the worst performers as the fourth quarter GDP fell even more than expected, "reinforcing the dovish sentiment generated after last week's European Central Bank monetary policy announcement", says Nick Bennenbroek, Head of Currency Strategy at Wells Fargo Bank.
"The European Union outlined a proposal to implement a financial transaction tax across the region, and while such a move has previously been signaled, that announcement may also be adding to negative sentiment", Bennenbroek comments.
Finally, Wells Fargo analyst notes that even though there may be some volatility around the G20 meeting, "the underlying fundamentals for the euro and yen are generally negative, suggesting further (and possibly gradual) weakness for those currencies against the greenback over time".
"The European Union outlined a proposal to implement a financial transaction tax across the region, and while such a move has previously been signaled, that announcement may also be adding to negative sentiment", Bennenbroek comments.
Finally, Wells Fargo analyst notes that even though there may be some volatility around the G20 meeting, "the underlying fundamentals for the euro and yen are generally negative, suggesting further (and possibly gradual) weakness for those currencies against the greenback over time".