Will the euro continue to climb?

We think that the euro’s latest rise against the US dollar was a justified reaction to Mario Draghi’s hints that QE will be tapered early next year, despite warnings from the ECB that the comments were over-interpreted. We still expect the euro to edge down by year-end, but this rests on our view that the US Fed will tighten policy by more than markets expect, not that the ECB will fail to taper.

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