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Nomura expects euro to outperform pound, dollar and yen
Nomura points to strong foreign inflows into euro area bonds and comparatively better debt dynamics as support for the EUR outlook.
FXStreet reports that Nomura strategists expect the euro to outperform the British pound, the US dollar, and the Japanese yen, citing stronger relative fiscal conditions in the euro area.
According to the note, Nomura says the UK faces larger fiscal vulnerabilities than the euro area, with debt-to-GDP higher than the euro aggregate and net interest payments expected to rise further.
Nomura also links its euro view to foreign investor demand for euro area debt, saying overseas inflows into euro area bonds have surged in recent months.
The strategists add that they see fewer downside risks from political uncertainty in parts of Europe than in the past, and they argue this backdrop should keep EUR in a stronger position versus USD and JPY where fiscal dynamics are described as more challenging.