Analysts at Citigroup warn investors of the coming strong pressure on the single currency and the pair EUR/USD in particular. The main reason for such assumption is the reluctance of the European Central Bank to perform rapid and decisive measures to reassure investors convincing them that the crisis won’t spread from Ireland to the other euro zone countries such as Portugal and Spain.

The specialists note that eventually when the threat of euro area’s collapse will become real the EBC will certainly have to act. Never the less, in the near term Europe’s monetary authorities are very unlikely to extend bond purchasing program or give the region’s banks more liquidity support. According to Citigroup, it may happen that the European officials won’t even try to calm the market verbally. As a result, Citigroup expects euro’s decline to be even bigger than it was thought before.



Chart. Daily EUR/USD

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