Credit Agricole FX Strategy Research notes that the EUR failed to hold on to its initial gains, regardless of Emmanuel Macro winning French elections by larger than anticipated margin.
In that regard, CACIB argues that from the current levels it will depend on other factors such as further stabilizing ECB monetary policy expectations to drive the EUR.
“As we take a more constructive medium-term stance on the ECB, we believe that dips in the Euro should be bought, for instance against the GBP. We see scope of diverging monetary policy expectations to the benefit of the cross,” CACIB argues.
In line with this view, CACIB went long EUR/GBP* on Friday.
EUR/GBP is trading circa 0.8441 as of writing.
Source: Credit Agricole CIB Research
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