This is via the folks at eFX.
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Goldman Sachs discusses the EUR outlook and maintains a cautious bias in the near-term and a bearish bias in the medium-term.
- "The November flash PMIs added to a growing theme across Europe that things are nowhere near rosy, but also not as bad as feared at times this summer. We think this adds some important context to recent FX moves—it is not just about US CPI and the Fed. At the same time, ongoing activity constraints in the Euro area that will almost inevitably stretch well into next year demonstrate the limitations on recent FX performance. Once positioning gets back to neutral, we are skeptical that the Euro can durably rally while the current account continues to deteriorate and activity remains in (modestly) contractionary territory," GS notes.
- "And into year-end, we think markets and the FOMC will start to push back on the substantial FCI easing over the last month, which we think is still inconsistent with Fed's policy goals," GS adds.
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EUR/USD update this morning in Asia - the USD is bid on the China protests.
