Market Analytics

Analysts at Deutsche Bank think that the greenback will maintain its safe haven status, while the European currency will remain the “guiding light for the biggest risk swings”. In their view, the Fed’s actions will reinforce the risk-on sentiment and lead to the growth of stocks and higher-yielding currencies, while short positions on euro will squeeze. The bank claims that the fair value for EUR/USD after that squeeze will be at $1.3500. It will be possible to speak about some real recovery only if euro manages to rise above this level. 

Economists at Goldman Sachs note that the Federal Reserve’s statement may provoke fresh reserve diversification from US dollar into other currencies making American currency decline. According to the bank, euro and yen are the most likely candidates to benefit from such flows.

At the same time, specialists at Nomura point at the fact that although some euro-zone asset markets appear to be recovering, euro-zone residents start to put capital to work in the US and elsewhere. In their view, this will put euro under the negative pressure versus mote counterparts and not just the greenback.