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2 Apr 2013
Forex Flash: EUR gradually beginning to stabilise - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the euro is beginning to stabilise after Cypriot development intensified downward pressure towards the end of March.
He feels that so far there has been little evidence of broader contagion to the rest of the Eurozone, which has helped to limit Euro downside in the near term. He writes, “We expect that the ECB will acknowledge at their policy meeting this week that the pace of economic recovery in the Eurozone is still proving disappointingly slow which will help to dampen upside potential even if Cyprus concerns continue to ease. However we do not expect the ECB to explicitly signal that a rate cut is imminent. ECB President Draghi will no doubt be questioned about developments in Cyprus to which he is likely to attempt to reassure investors that circumstances were unique.”
He feels that so far there has been little evidence of broader contagion to the rest of the Eurozone, which has helped to limit Euro downside in the near term. He writes, “We expect that the ECB will acknowledge at their policy meeting this week that the pace of economic recovery in the Eurozone is still proving disappointingly slow which will help to dampen upside potential even if Cyprus concerns continue to ease. However we do not expect the ECB to explicitly signal that a rate cut is imminent. ECB President Draghi will no doubt be questioned about developments in Cyprus to which he is likely to attempt to reassure investors that circumstances were unique.”