Strategists at Citigroup Inc. believe that the bearish pressure on the European currency may reinforce as the efforts of the policymakers to ease the euro area’s debt crisis didn’t manage to diminish increasing bond yields including those for Belgian and French debt.

The specialists underline that the crisis begins to spread disorderly and doubt that Europe’s monetary authorities will be able to take measures rapid and forceful enough to stop further contagion.

As a result, Citigroup analysts believe that euro trade is going to be more volatile in the coming days. In their view, it’ll become clear after the ECB's monetary policy meeting if recent peripheral events will have an impact on the ECB's exit policy. The bank expects the European Central Bank to announce the end of 3-month LTROs (long-term refinancing operations), that may increase the cyclical attractiveness of euro.

More info about FBS