EUR/USD resilience could come upwardly to an destination if supportive Dec flows similar corporate yearend net income repatriation in addition to banks’ euro buying ahead of the AQR create non extend into January, argues Citibank.
"EURUSD remained rather resilient of belatedly consistent amongst the designing of euro outperformance inward the calendar month of Dec nosotros had inward recent years... Bank inflows into EUR inward detail accept intensified noticeably inward Q4 according to Citi FX menses data," Citi notes.
"As shown inward Figure 3, the EURUSD outperformance inward Dec was oft followed past times underperformance inward January suggesting that the yoke may expect vulnerable in ane lawsuit again if the supportive Dec flows create non extend into the New Year," Citi adds.
"We too banker's complaint that EURUSD all the same looks quite overvalued compared to a justice of relative economical surprises out or the Eurozone in addition to the the States Our fair-value model based on EUR-USD charge per unit of measurement spread, FX volatility, marketplace positioning in addition to relative banking corporation functioning suggests that EURUSD should move trading at 1.3200," Citi projects.
