Pair risks further decline near term

23 May, 2018

Aila Mihr, Analyst at Danske Bank, does not rule out further weakness around the single currency in the near term.

Muted moves in majors yesterday despite renewed worries over what the new Italian government could imply in terms of debt dynamics.

Notably, CHF has continued to strengthen but we stress that the situation in Italy still remains far from leading to a new euro debt crisis.

That said, it is set to weigh on the single currency at least until more clarity on the actual political programme is achieved over the coming weeks.

Today, focus on the relative stance of PMIs: if the US maintains its favourable cyclical position, it could fuel further EUR/USD downside near term.


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