EUR may be volatile around data releases - Westpac

Tim Riddell, Research Analyst at Westpac suggests that the lack of central bank meetings and limited speakers until end-Aug/Sep and illiquid markets mean that EUR may be volatile around data releases.

Key Quotes

“Strong survey and activity data in 1H’17 drove EUR sentiment while reduced downside risks have increased ECB’s tapering potential. However, some moderation in surveys is appearing. Should this feed into already low inflation, market focus may return to ECB being very gradual in its guidance/tapering into next year.”

“SNB reiterated that CHF is overvalued. Reduced Eurozone risks may allow EUR/CHF to establish a 1.10-1.15 range and could also see USD/CHF rise.”

“EUR/USD’s push higher recently has been aided by USD weakness. Unless EUR data surges, EUR/USD may be establishing a higher based range (1.12- 1.20).”