EUR: Tactical Bearish EUR Better Expressed Via EUR/GBP Than EUR/USD – ING

EUR/USD is on the back foot, getting closer to 1.22. But perhaps the weakness of the euro is better expressed against the pound:

Here is their view, courtesy of eFXnews:

ING Research discusses the EUR outlook and thinks that tactical EUR downside in the near-term is prone to be more materialized on  EUR/GBP than on EUR/USD. In the medium-to-long-term, ING remains structurally bullish on EUR. 

“While investors try to make sense of the trade war implications for markets, we think there may be a higher premium for monetary policy normalisation stories to drive currencies in the near-term…

Signs of resilience in EZ economic activity will be required to underpin the EUR’s current pro-cyclical rally, with further negative data surprises weighing on the currency. Should this occur, it may be more visible on the crosses (eg, a lower EUR/GBP) – rather than EUR/USD, which continues to be propped up by a politically weak $,” ING argues.

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