Japanese buying of German and French debt, while at the same time shunning U.S. bonds, will be an ongoing major source of support for EUR/USD if the trend continues. It also tallies with the notion that reserve managers may look to diversify holdings away from Treasuries. Recent trade tensions, together with a deteriorating U.S. fiscal deficit, could accelerate the move away from the USD, with the EUR continuing to be one of the main alternatives.
Source: Bloomberg Pro Terminal
Trader Bozhidar Arabadzhiev
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