Euro-Schizophrenia

Thursday, July 27th, 2017 Categories: Earnings Estimates, Eurozone, FX rates, Risk aversion

Domestic investors don’t like a strong euro

International investors are still in love with Eurozone equities, but the strength of the euro is starting to cause problems for domestic investors. The euro is probably overbought in the short-term, but further strength later this year would cramp Eurozone earnings growth in 2018 and tighten monetary conditions in which would allow the ECB to delay interest rate rises and shrinking its balance sheet.

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