Higher EUR and the spill-over into the G10 FX space - ING

In view of Petr Krpata, Chief EMEA FX and IR Strategist at ING, the rise of EUR/USD should be a large positive for European G10 currencies versus their dollar peers because the strong EUR will lift all tides in Europe and bring the European FX higher with it (even the currently battered NOK and GBP).

Key Quotes

“We look for more upside to European currencies against USD purely on the higher EUR/USD overlay basis.”

“Short USD/SEK positions should do well, probably even better than long EUR/USD, particularly in the context of the insufficient Riksbank extension of its QE (SEK15bn over 2H17 vs our estimate of SEK80bn needed to offset ECB QE) and the non-negligible medium term EUR/SEK overvaluation (our EUR/SEK medium-term fair value estimate is at 9.00).”