The resolution between Greece and its European creditors on a third
bailout package has served to refocus markets' attention to the historic
divergences in global monetary policy settings, notes Australia and New
Zealand Banking Group (ANZ).
"While President Draghi was flagging the risk of adding to the ECB's
existing QE program, Fed Chair Yellen reaffirmed that the Fed remains on
track to commence hiking interest rates this year," ANZ adds.
"In this environment, the EUR is likely to revert to the
funding currency of choice, suggesting the EUR/USD will continue to
grind lower," ANZ projects.
ANZ targets EUR/USD at 1.05 by Q3-end and 0.99 by year-end.
