Forex: EUR/USD, bullish outlook in 2011 – ING

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Mon, 07 Feb 2011 05:02:00 +0100

Forex: EUR/USD, bullish outlook in 2011 – ING

FXstreet.com (Barcelona) - Euro/Dollar has been able to stage a minor recovery along the Asian session, with the pair reaching an intra-day high at 1.3622. The rebound comes after the Euro hit a fresh 2-week low at 1.3540 last Friday, following a contrarian NFP report; the lack of clarity on the actual jobs market situation has somehow dampened any USD upward follow-through in Asia.

On an interview for Reuters Insider, Chris Turner, Head of FX strategy at ING Commercial Banking gave his thoughts on the USD m/t based on the actual macro environment, saying: “With US demand and global activity picking up, it's a very bullish environment for commodity prices. Generally, that will see the Dollar gently weaken as long as the Fed keeps interest rates low, and the US yield curve steep”.

Looking forward, Chris thinks “that is going to be the case for the majority of this year, we don't look for bearish flattening of the US curve until much later this year or early into 2012. So, in that environment we see the Dollar staying weak for the majority of 2011”.

On his final remarks, his outlook on the EUR/USD remains positive, quoting that “perhaps the Euro will start to play catch up with some of the other currencies that are performing so well against the Dollar at the moment, for example, the Australian Dollar, the Canadian Dollar, Swiss Franc; everything is on its multi-decade highs, so we think actually Euro-Dollar, despite this week's setback, can probably push over $1.40, maybe as high as $1.45 later this year”.