🚀 June’s AI-picked stocks soar, with Adobe +18.1% in 11 days. Don’t miss July’s upcoming picks.Unlock full list

Bearish euro sentiment is back - BoA Securities

Published 06/11/2024, 08:27 AM
© Reuters.
EUR/USD
-

Investing.com - Bearish euro sentiment is back, according to Bank of America Securities, in the wake of the European Parliament elections and the surge in political risk.

At 08:25 ET (12:25 GMT), EUR/USD traded 0.3% lower at $1.0730, with the pair well over a full percentage point lower over the course of the last week.

The European Parliament elections, which concluded over the weekend, saw sharp moves to the right in a number of countries, most prominently in France. 

This prompted French president Emmanuel Macron to call a shock snap legislative election on Monday, a move which amounts to a roll of the dice on his political future, potentially handing major political power to the far-right party of Marine Le Pen.

Ratings agency Moody's (NYSE:MCO) issued a credit warning after the event.

"This snap election increases risks to fiscal consolidation," Moody's said in a statement late on Monday, describing it as "credit negative" for the country's Aa2 rating.

The EUR/USD pair looked to be breaking above 1.09 and escaping the year-to-date downtrend just last week, analysts at BoA Securities said, in  a note dated June 10. 

However, EU political turmoil (along with a strong U.S. jobs number) brought EUR/USD back to a 1.07-handle to start this week. 

“On the back of these catalysts, the bearish sentiment is now broadening out to several EUR-pairs. Event analysis shows bearish continuation signal for EUR/USD as EUR put skew sharply widened by 4% over the weekend,” said BoA.

“Positioning analysis shows broad EUR downtrend signals vs GBP, JPY and SEK.”

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.