This week’s volatility in LNG is itself a sign that sensitivities around energy in Europe remain heightened. Thus, economists at Rabobank expect the Euro to move downward.
While expectations of higher interest rate differentials are the textbook example of a currency supportive factor, in reality, higher rates may not be currency supportive if growth fears are compounded.
Given that higher energy prices would stoke long term growth concerns for the Eurozone, we would be wary about seeing volatility in LNG prices as a reason to add to long EUR positions. Since the ECB may have already reached the peak in its policy rates and given the economic headwinds facing the Eurozone, we view the market as being too long EUR.
We see EUR/USD at 1.08 on a three-month view.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.