Week in FX Europe – EURO Landing Continues To Have Opportunities
Europe is “the land of opportunity” so says the deep in the profit long EUR investor. It was only a couple of weeks ago that the psychological 1.35 level was a mere mirage. It is now becoming just another small hurdle to take out. Falling Euro periphery yields and Friday's LTRO schedule repayment results are giving the ‘single currency' some new found momentum that wants to push it towards the new psychological point of 1.37. Investors are now asking ‘and why not.'
The Euro fiscal situation is becoming more improved. The ECB is pro-actively reducing their balance sheet while the Fed is adding to theirs. An improved fiscal situation will eventually translate into a much-improved economic one. Yesterday's poor US new home sales will continue to weigh on the ‘big dollar.' Even after four years, it is hard to say what the long term prospects are for the US housing market as things remain far from great!
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