Euro: Set to outperform Pound, US Dollar and Yen - Nomura

Nomura argues that the euro should outperform the British pound, US dollar and Japanese yen because the euro area has comparatively stronger fiscal resilience and is attracting significant foreign inflows into government bonds. The bank sees the UK as the weakest of the major currency peers due to higher debt-to-GDP, rising net interest costs and ongoing fiscal credibility concerns under the Labour government. While France still poses some risks, Nomura says these are offset by stronger positions in Germany and Spain, leaving the euro area’s overall debt dynamics more favorable than the UK and US. The note is mildly bullish for EUR, as it frames the currency as relatively safer and better supported by capital flows and fiscal fundamentals.