Politics expected to weigh on EUR near term – Danske Bank

Analyst Ayla Mihr at Danske Bank said the upcoming political events in Austria and Italy should weigh on the single currency in the very near term.

Key Quotes

“The oil-led selloff in EUR/NOK continued yesterday as the price on Brent crude reached USD53/bbl, pushing EUR/NOK down to 8.95. We still look for a higher EUR/NOK in the short term as we think the oil market is overreacting to the OPEC deal and because a strong seasonal effect will weigh on NOK in the latter part of December”.

“The US jobs report is not likely to influence expectations of a Federal Reserve rate hike later this month and should therefore not have a big impact on EUR/USD today”.

“European politics on the other hand may weigh on EUR today with the Austrian Presidential election re-run and the Italian constitutional referendum taking place over the weekend”.