Targeting 1.1600
Morgan Stanley is out with a Global FX Strategy. Plain and simple. Buy EURUSD.
They say:
"A weaker USD, looser financial conditions and the Brexit risk event out the way have meant that there are sings of businesses starting to grow around the world. We are not saying that all is rosy and that growth rates will reach average pre-2007 level, but we believe that the FX markets right now will respond to changes in economic circumstances and surprises. In fact, the MSCI world equity index has become more correlated with global economic surprises"
They add:
"Economic data divergence between the eurozone and the US should help EURUSD to break beyond the previous high at 1.1366, opening the room towards our 1.16 target"
They say:
"US investment down, euros on investment up: the regional Fed surveys have also been pointing toward a flat reading in July. In contrast euro zone activity has been stabilizing with theWSJ reporting that euro zone companies are planning to raise investment spending even after the Brexit vote. A larger proportion of companies in Germany, France and Spain were planning to increase capital spending relative to the previous survey in February."
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