EUR, CHF, GBP flows: EUR offer, GBP and CHF staying firm, but...
EUR/USD looks likely to hold clos to current levels. GBP and CHF gains may start to falter
A fairly quiet overnight session but EUR/GBP remains offered, hitting another new low for the month, while EUR/CHF hit its lowest since August 8. To some extent this reflects general EUR weakness, with EUR/USD slipping back from the highs near 1.12. There is little on the calendar today to trigger any new trends, but there will be some interest in the Eurozone money data at 09:00 BST. While M3 growth has started to recover a little, loan growth remains very weak, and this was commented on by ECB chief economist Lane this week, noting that it may on part be a consequence of the ECB’s unwinding of their QE. EUR/USD looks close to fair at current yield levels, so we wouldn’t expect a break below 1.11 or above 1.12. The strength of GBP and CHF is hard to justify medium term, and the 0.84 level in EUR/GBP and the 0.94 level in EUR/CHF ought to offer significant support.
