EUR trading heavy – Danske Bank

Jakob Christensen, chief analyst at Danske Bank, notes that the EUR is trading heavy still post ECB’s tiered deposit talk earlier this week with notably EUR/CHF continuing to fall to new 2017 lows even though risk sentiment has stabilised a bit.

Key Quotes

“SNB’s Maechler yesterday reiterated that the franc is ‘highly valued’ and again mentioned the importance of the intervention pledge. We have previously stressed that it would require EUR/CHF to fall towards 1.10 before the latter would be seen but it is worth keeping an eye on the weekly sight deposit figures near term to see whether the SNB starts to step in.”

“Meanwhile, the GBP is set for another volatile day as PM May is set to bring the withdrawal agreement (but not the political declaration on future relations required to go through with Brexit) to a vote in parliament today in order to meet the formal requirements for an extension (most likely it will be voted down). EUR/GBP stuck in the range 0.85- 0.87 for now.”