Credit Agricole urges not to buy EUR.

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Credit Agricole analysts suggested investors to avoid buying EUR. “We expect the single currency to remain subject to downside risks. This is especially true as the latest UK-related development is likely to increase political uncertainty in the EU further and as more muted growth prospects should keep the ECB in a position to consider additional policy action if needed. As reiterated by ECB President Draghi this week, downside risks to growth and inflation remain significant and uncertainty high. At the same time he stressed that more can be done if needed. Although it remains too early to expect the central bank to consider further policy measures, there is no scope of rising rate expectations anytime soon. In an environment of EU specific risk aversion, we believe too that the EUR should remain positively correlated with risk aversion.” written in the report. Taking into account the above mentioned, analysts suggested not buying EUR, particularly against USD, adding that uncertainties in the global economic outlook may prevent Fed from raising rates anytime soon.

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