Thursday, September 10, 2015

USD overvalued but can peak further up – BAML

FXStreet (Delhi) – Research Team at BAML, suggest that in the current market situations even as the USD is overvalued but it hasn’t peaked yet and there is more scope for it to appreciate further in the future.

Key Quotes

“USD overvaluation - large at 15% - is understandable given market expectations of Fed tightening and in fact should probably be bigger. We expect USD has scope to strengthen further.”

“Conversely EUR is arguably not undervalued enough. EUR is close to equilibrium, as is EUR/USD; a surprising result given monetary policy divergence which we expect will continue to be a powerful driver, and underpins our call for EUR/USD to move towards parity by the end of 2015.”
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