Pradeep Khanna, Director & Head of FX Trading, HSBC India says barring worries over Eurozone, the euro is likely to trade higher in the medium-term. He tells CNBC-TV18 that the weakening dollar supports the growth rally for the Euro.
Below is the verbatim transcript of Khanna's interview with Latha Venkatesh and Anuj Singhal of CNBC-TV18 . Also watch the accompanying video Q: The euro was hitting towards that 1.47 mark but recoiled from it a tad. There is the ECB meeting coming up. How do you see the euro-dollar trajectory for the short-term and for a slightly a longer-term quarter? A: Euro is basically being driven by factors both from the US, as well as from the euro zone. There is unfortunately not extreme clarity on both. We have seen a fair amount of volatility over the last month on account of risk costs in the form of weaker US data as well as in the form of worries on the euro zone periphery, Greece etc. If the euro zone worries lessen, then there is a lot more likelihood of euro rates going higher than there is of the USD even in the medium term. Also, there is an expectation because of weak US data and expectations that US rates will stay low, that the dollar will generally be a bit weak. That tends to support euro in terms of an alternate major reserve currency and there is a fair amount of recycling of reserves that happen of reserve managers etc. So we would generally tend to think that barring major worries from the euro periphery, one should see euro reasonably well supported and should then trade higher in the medium-term. Q: WhatDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
