EUR/USD may rally to 1.3500 on Greek debt deal – BNP Paribas

source:FXSTREET.COM

The Euro has largely priced in an almost done agreement on an aid package for Greece, says Rob Ryan, G10 currency strategist at BNP Paribas. According to the latest market headlines coming out of Athens, a deal is likely to be struck in the next few hours upon resolving an issue on pension cuts.

The EUR/USD, despite the positive news priced in, will likely see a knee-jerk move higher if and when that deal is announced, potentially rising as high as 1.35 or 1.36 as more EUR shorts are stopped out, he says. But it may be downhill from there for the EUR. “We think once that initial move is over, the euro will underperform on the back of weak growth prospects and easy monetary policy,” says Ryan.

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