The ECB held rates steady in July, but the impact of the June easing action is likely to lag, says BNP Paribas.
“We believe the EUR remains an attractive selling proposition. Any further evidence of slower activity in incoming data will also weigh on the EUR and we remain short EURUSD and EURGBP in our recommendations portfolio,” BNP advsies.
In EUR/GBP, BNP holds short from 0.8140 targeting 0.78 over the coming month.
“For sterling, we expect this week’s BoE meeting to be a non-event, but as long as manufacturing output data on Tuesday remains in line with expectations, the sterling should remain in the driving seat. We believe the UK will be the fastest growing G10 economy in 2014 at 3.4% and anticipate robust data to support this,” BNP projects
In EUR/USD, BNP holds short from 1.3620, with a traget at 1.32, and a stop at 1.3820.
“The dichotomy of strong jobs data versus weaker headline growth whas been further exacerbated by the June nonfarm payroll report. Persistent job creation makes the GDP rebound in Q2 and/or Q3 more likely and we believe this will be reflected in higher US Treasury yields and a stronger USD,” BNP argues.
