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6 Feb 2013
Forex Flash: If EUR/USD holds 1.36, look to 1.3400 – BBH
Providing that EUR/USD can hold 1.3600, Brown Brothers Harriman analysts suspect that we could see a test of 1.3400 soon.
They note that Hollande’s call for an EMU currency policy and a medium-term target for the Euro will provide fresh fodder for talk of currency wars and is an articulation of the traditional French view. However, they feel the foreign exchange market has always been an area that conflicting national interest is expressed. They finish by writing, “The military metaphor also confuses words with actions. There is no evidence that the “currency wars” are spilling over into increased trade tensions, for example. Seeing the world through the lens of currency wars also forces strange conclusions. For example, was Europe winning the “currency wars” as the Euro approached $1.20? Probably not.”
They note that Hollande’s call for an EMU currency policy and a medium-term target for the Euro will provide fresh fodder for talk of currency wars and is an articulation of the traditional French view. However, they feel the foreign exchange market has always been an area that conflicting national interest is expressed. They finish by writing, “The military metaphor also confuses words with actions. There is no evidence that the “currency wars” are spilling over into increased trade tensions, for example. Seeing the world through the lens of currency wars also forces strange conclusions. For example, was Europe winning the “currency wars” as the Euro approached $1.20? Probably not.”