Société Générale’s Chief Global FX Strategist, Kit Juckes, suggests that Euro bulls are currently more reliant on softer US GDP data than on hawkish comments from the European Central Bank (ECB). The primary focus for the Euro lies in the growth outlook rather than the ECB’s monetary policy stance.
Juckes emphasizes that expectations regarding growth carry more weight for the Euro at present. The correlation between EUR/USD and relative growth expectations strengthened in the latter half of the previous year, in contrast to the earlier part of the year when the correlation with relative rates was more prominent. As the Euro’s performance is increasingly tied to growth prospects, Juckes points out that the upcoming US Q4 GDP data, with a consensus at 2% and Société Générale at 1.9%, could be more influential than developments in Europe.
