Why the Euro Could Turn Around: Strategist
The euro is facing serious headwinds, but this strategist thinks sentiment could easily shift.
To put it mildly, this has been a less than great week to hold the euro. The single currency is approaching the year's lows after a bruising fall, thanks to downgrades of Spanish banks, endless political turmoil in Greece, and word that key parties are preparing themselves for a Greek exit from the euro zone.
Lasanka Perera, a managing director at Admiral Markets, sees all that and more — but he says the doomsday warnings are overblown.
"What we do have is a market that's headline obsessed, short term, and purely sentiment-driven at this stage," he told CNBC. "Economic fundamentals and rationality have taken a back stage."
Certainly, Greece is in crisis, Perera says, but "the problem here is that everyone thinks they know what's going to happen with the euro, so I think to a large extent that's been priced in."
Also, with the euro nearing its January lows, and the dollar index having risen sharply, Perera says the two currencies are approaching key support and resistance levels. Algorithmic traders could help change things as well, he says. "They're largely trend-following systems, so when something does happen, I think there will be a very sharp turn."
You can watch the discussion on this video.
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