Wednesday, July 13, 2011

Morgan Stanley: pessimistic view on EUR/USD

The single currency went up today after hitting yesterday minimum at $1.3837 reaching $1.4100 on the talk that the ECB and China are buying the bonds of indebted peripheral euro zone’s nations.


Yesterday Moody’s Investors Service lowered Ireland’s debt rating from Baa3 to Ba1. As a result, Ireland became the third euro zone nation with credit rating below investment grade with Greece and Portugal already in this group.


The Italian Treasury is scheduled to sell as much as 5 billion euro ($6.99 billion) of bonds tomorrow.


Analysts at JPMorgan Chase are pessimistic on the situation in Europe. The specialists advise to sell EUR/USD on the rebound. The main theme on the market is now the fear of debt crisis contagion.


Strategists at Morgan Stanley think that the single currency still seems to be vulnerable. In their view, euro will slide to $1.36 by the end of 2011. The economists note that there are still big risk events ahead that may affect the European currency such as the bank stress tests.
 
writed by FBS Holdings © 2011