Equity exposure of non residents limit any significant rebound of EUR/USD

Following the crisis triggered by the coronavirus pandemic and the major uncertainties this has created , we consider to what extent significant capital flows from the Eurozone could penalise the EUR/USD in coming months. In 2019, the euro area no longer reflected net capital outflows as in 2018, but slightly positive inflows, without this having an impact on the EUR/USD. In 2020, however, net capital flows may well turn negative again, as a result of a repatriation of some non-resident capital into European equities.