EURO WILL SLIP EVEN LOWER - CIBC
European shares slide as the global economic outlook darkens. Canadian Imperial Bank of Commerce Head of Foreign Exchange Strategy Jeremy Stretch thinks the euro will slip even lower.
SHOWS: LONDON, ENGLAND, UK (OCTOBER 13, 2014) (REUTERS - ACCESS ALL)
1. CANADIAN IMPERIAL BANK OF COMMERCE, HEAD OF FOREIGN EXCHANGE STRATEGY JEREMY STRETCH, SAYING:
JOURNALIST ASKING JEREMY STRETCH: "What do you think? We're getting a little bit of a reprieve for the dollar but long dollar must be the trade still, right?"
STRETCH: "Yes, I think so. If we work on the assumption that the U.S. data is still going to remain relatively robust as we continue to do so and certainly that contrasts with elsewhere. As you've just been identifying, the euro zone data has been fairly awful of late and doesn't look as though that's going to turn around anytime soon. And the real presumption of divergent monetary policy action in the U.S. compared to elsewhere whether it be the BOJ, whether it be the ECB, also continues to favor broadly long dollar policies. I think it is a case of just looking for any short-term dips to just provide some better levels to get back in and reload positions."
JOURNALIST: "And are you still selling the euro?"
STRETCH: "Yes. I think it has to be the case that the path of least resistance is for a lower euro. The one caveat to that I would say is that if we were going to see a bout of extreme risk aversion, then those currencies with current account surpluses will see some support. So of course the euro does see a little of benefit in that perspective but I think overall, the data story, the fundamental backdrop, the questioning of Germany and its German policy, which is pursuing for the rest of Europe, I think continues to underline short euro tendencies and I think we will see another crack at that 1.24 threshold."
JOURNALIST: "All right. I mean, you've been bearish for a while now, crack at 1.24. At six months, a year out, what are you saying now, Jeremy?"