Euro: Fitch move caps rebound potential against US Dollar – ING
Chris Turner at ING highlights Fitch’s unscheduled shift of France’s sovereign outlook to negative, which may weigh on French bonds and the Euro (EUR).
Commerzbank's Thu Lan Nguyen highlights the potential for EUR/USD to experience renewed volatility as policy risks loom. After settling near 1.12 following a drop from 1.16, she notes that implied volatility in options markets has decreased once more. While she acknowledges that limited differences in expectations between the Federal Reserve and the European Central Bank, coupled with smaller and more synchronized interest rate cycles, have helped to stabilize foreign exchange swings, she warns that the current calm in FX markets is premature given mounting geopolitical and fiscal risks.
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