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28 Mar 2013
Forex Flash: EUR/USD year-end target at 1.25 – Scotiabank
FXstreet.com (Barcelona) - The bloc currency continues to scale back its initial gains after hitting fresh highs in the vicinity of 1.2840/45, as fears on Cyprus and the likeliness of a bank run has somehow eased on Thursday.
Camilla Sutton, Chief Currency Strategist at Scotiabank remarks that the recent developments in Cyprus expose the political vulnerability of the euro area in times of financial turmoil, enhanced by the lack of a banking union.
“On the back of recent developments in Europe, we have decreased our already bearish year-end EUR forecast to 1.25. The combination of developments in Cyprus, a revaluation of euro wide deposit risk, a lack of progress on the banking unionwhich is the only solution to ending the negative bank to sovereign feedback loop are all high lighted by what has occurred in Cyprus over the last several weeks”, concludes Sutton.
Camilla Sutton, Chief Currency Strategist at Scotiabank remarks that the recent developments in Cyprus expose the political vulnerability of the euro area in times of financial turmoil, enhanced by the lack of a banking union.
“On the back of recent developments in Europe, we have decreased our already bearish year-end EUR forecast to 1.25. The combination of developments in Cyprus, a revaluation of euro wide deposit risk, a lack of progress on the banking unionwhich is the only solution to ending the negative bank to sovereign feedback loop are all high lighted by what has occurred in Cyprus over the last several weeks”, concludes Sutton.