“The outlook for Europe is poor, it started to get turbulent late last week, and it’s almost certain to get worse in the future,” TweGordon Shannon, portfolio manager at ntyFour Asset Management LLP, said.
Germany unveiled a bailout plan of about 65 billion euros ($65 billion) on Sunday and Finland said it would implement a $10 billion plan to stabilize electricity markets. Sweden on Saturday announced $23 billion in emergency back-up funding for power companies to avoid a wider financial crisis.
At the same time, before the above-mentioned bailout plan was announced, Kamakshya Trivedi and othersGoldman SachsAnalysts lowered their EUR/USD target for the next three months to 0.97 from 0.99 previously, in a report on Friday. They also expect EUR/USD to remain below par for the next six months, having previously forecast a rally to 1.02.
“While the euro zone’s gas storage efforts for this winter have made good progress, this has come at the cost of severe demand cuts and has not completely eliminated the risk of more severe supply problems in winter,” they wrote in the report.