EUR/USD: too early to presume stability below 1.2000 - AmpGFX

Greg Gibbs, Founder, Analyst, & PM, Amplifying Global FX Capital Pty Ltd explained that in recent weeks, EM has significantly underperformed the US and other major markets across currency, bond and equity markets.  

Key Quotes:

"Several higher-yielding EM currencies have fallen more sharply; including ARS, TRL, IDR and INR."

"There appears to be some momentum behind the recent capital flight from EM that may not quickly reverse."

"US bond yields have stabilised near recent highs in the last week, but most other major market yields have retreated, further increasing the USD yield advantage to new highs."

"Economic surprise indices for the Eurozone have sunk to new extreme lows and maybe forcing a shake-down in the market’s stubbornly optimistic outlook for the region. EUR has hit a new low for the year, but it is too early to presume it will stabilise."