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Euro "to climb further" if no ECB action
The Euro is close a seven month high against the
dollar, and Saxo Bank's John Hardy thinks that if we don't see any "real" policy action from the European Central Bank when it meets this week, it will carry on climbing.
In fact, if the ECB fails to impress the markets, John warns euro dollar could "easily reach 1.40 in the coming weeks". Now he thinks the only way we will see the euro weakening is if the ECB manages to expand its balance sheet.
John believes the central bank has "run out of ammunition" which means it can't take part in the so-called currency war, because it can't employ the "sorts of easing that other central banks can".
Another route to euro weakness, according to John, is the "return of the systematic game" which we are currently seeing in Italy. But John thinks this won't happen any time soon.
01:25 minutes
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