We are in an awkward situation between the ECB and the Federal Reserve meetings, noted Jeremy Stretch, Head of G10 FX Strategy for CIBC, when he joined Zak Mir and Mike Ingram on the Tip TV Finance Show.
Key Points:
Stretch commented that we are still digesting the ECB meeting, with the high market expectations being created by the ECB themselves.
He believed that 2015 will be dubbed the year of central banks surprising the markets, causing volatility and market dislocation from expectation and reality.
Going forward, Stretch outlined that if we are going to get a tangible recovery over the medium-term, we need fiscal and monetary policy working in tandem.
He continued that the story of 2016 may well be the Eurozone recovery doing better and we see a structural recovery in the Euro.
When concerning the EUR/USD, Stretch highlighted that it is not falling to 1.05, with a less dovish statement to go with an assumed Fed rate hike next week may see the pair at 1.07. He also concluded that the parity parties are largely over.