Morgan Stanley expects the euro to fall to $1.02 by the end of this year, a loss of about 7 percent from current levels, David Adams, head of currency strategy for the Group of Ten at the U.S. financial giant, said in an interview, Bloomberg reported Tuesday.
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EU prepares for a major trade war
«There is a good chance that the market will once again focus on the fact that the ECB [Banco Central Europeo] could cut further and faster than currently anticipated,” he said. “This week’s meeting could be an important catalyst for the market to start thinking about that,” he added.
He also indicated that if data continues to deteriorate in Europe, the market needs to start thinking about a 25 basis point cut at every meeting or even the risk of a 50 basis point cut, just as the market has applied concerns about a US slowdown to a faster and deeper cycle of cuts by the Federal Reserve.
“Political risk premiums and uncertainty are rising at a time when economic growth is slowing. Both factors suggest that investors may be less willing to deploy capital in the region,” Adams concluded. With RT
