If you've been whipsawed by the euro's
The times, they are a changing, says Jens Nordvig, global head of FX strategy at Nomura Securities.
The euro, he says, is moving "away from risk premium driven moves, towards more growth driven fluctuations." And that is not going to be good for the currency, he adds. "We expect a continued gradual decline in EURUSD driven by euro zone growth underperformance."
For a long time, the northern part of the euro zone was robust enough to offset weakness in the periphery. But that is no longer entirely the case, with
That's not all, Nordvig says. "Equity outflows from the euro zone may be increasingly important in driving the euro weaker."
So Nordvig recommends using the euro as a funding currency on a variety of trades, particularly against emerging market currencies. The common currency has already hit his first-quarter target of 1.30 against the dollar, but he says, "we stick with high level of European funding in our EM basket, and we look to sell EURUSD on spikes."
Over to you.