Portfolio outflows have pressured EUR/USD sharply lower from both private and public investors, notes SocGen. "EUR/USD should be around 1.31/1.32 in a normal trading environment as bullish Fed rate hike expectations were pulled back. We are anything but under normal circumstances. The ECB’s negative deposit facility has effectively forced reserves to stop diversifying into EUR, and as core European curves are crushed, reserves are forced out of the EUR," SocGen argues. The emergency selling of EUR reserves is partly over: "BIS data suggest that foreign reserves have increased their USD deposits at the expense of EUR ... (full story)