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Lower EUR heightens concerns about deflation risks

BofA Merrill Lynch notes in a report on Monday:

  • The decline of EUR/USD below 1.10 may be less benign than it may appear at first. 

  • We believe it is likely to exacerbate an exit from EM, increase the risk of an RMB devaluation, place renewed downward pressure on oil prices, and heighten concerns about deflation risks.  

  • Market Data
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