Euro's

Euro's rise presents a selling opportunity Call: Sell EUR-USD Reco rate: 1.1378 Buy 14 lots of USD-INR at spot price Rs64.2550 Sell 10 lots of EUR-INR at spot price Rs73.14
Key points Euro has risen against the dollar by 8.85% from its cycle low of 1.0452 reached on March 16, 2015. In Q1 of 2015 the European economy grew faster than the US economy but the relative performance is unlikely to be repeated for various reasons explained later. US job market is stronger; the economy is expected to gather pace in the coming months.  Low inflation in the euro zone arouses deflationary fears. ECB is in easing mode to fight deflationary risk. ECB has announced a larger than expected quantitative easing programme with monthly bond purchase of EUR60 billion from March 2015 and lasting till end September 2016. The Fed is expected to start hiking rates from September 2015. Divergent monetary policies of the Fed and the ECB spell further weakness in the euro-dollar pair. The ongoing geo-political tensions between Russia and Ukraine, and the resulting European sanctions are a drag on the European growth.  We expect the euro-dollar pair to move towards parity. We have recommended selling the pair at 1.1378 for a target of 1.02 and 0.95 with a stop loss at 1.2150.