Goldman Sachs (Macro not the FX team), we estimate that the fair value for EUR/$ is around 1.19

Goldman Sachs, we estimate that the fair value for EUR/$ is around 1.19,

not because foreign portfolio flows into the Euro area have abated, but because domestics are increasingly sending portfolio flows out of the Euro area, as ongoing ECB easing encourages a hunt for yield elsewhere. Our view is that these portfolio outflows have much greater potential to grow than foreign flows into the Euro area, given that periphery risk premia are already so compressed

As far as ECB policy goes, we think there is – counter to market consensus – plenty of room for President Draghi to ‘talk’ the currency lower, which he notably started to do in the August press conference when he said that “fundamentals for a weaker exchange rate are today much better than they were two or three months ago”. Reinforcing his comment, we estimate that the fair value for EUR/$ is around 1.19

http://www.zerohedge.com/news/2014-08-29/goldman-slashes-eurusd-forecast-120

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