Back
5 Jan 2015
EUR sees a nine-year low at 1.1864 – Rabobank
FXStreet (Barcelona) - The Rabobank Research Team share the dismal performance of the Euro in the Asian morning, with the pair falling to a nine-year low at 1.1864 before recovering to trade around 1.1950 levels.
Key Quotes
“This morning saw a collapse in EUR to a nine-year low of 1.1864 at one point before recovering to around 1.1950. Although the PMI data on Friday were also far from encouraging, the more likely trigger there is the looming Greek election on 25 January combined with comments in the German press suggesting that both Chancellor Merkel and Finance Minister Schaeuble regard a “Grexit” (i.e., Greece being kicked out of the euro altogether) as both “almost inevitable” and “manageable”. That is a story that really has a ‘Light blue touch paper and stand well back’ feel to it.”
“Indeed, German 5-year yields turned negative on Friday, while 10-years are now below 0.50%, leading one to wonder what any ECB QE might achieve (lower yields won’t help, surely, while higher yields would hurt unless they reflect a genuine recovery that QE itself can’t itself drive).”
Key Quotes
“This morning saw a collapse in EUR to a nine-year low of 1.1864 at one point before recovering to around 1.1950. Although the PMI data on Friday were also far from encouraging, the more likely trigger there is the looming Greek election on 25 January combined with comments in the German press suggesting that both Chancellor Merkel and Finance Minister Schaeuble regard a “Grexit” (i.e., Greece being kicked out of the euro altogether) as both “almost inevitable” and “manageable”. That is a story that really has a ‘Light blue touch paper and stand well back’ feel to it.”
“Indeed, German 5-year yields turned negative on Friday, while 10-years are now below 0.50%, leading one to wonder what any ECB QE might achieve (lower yields won’t help, surely, while higher yields would hurt unless they reflect a genuine recovery that QE itself can’t itself drive).”