0911 GMT - The euro's break below $1.14 has sent the exchange rate into stretched undervaluation territory, ING's Francesco Pesole says in a note. Short-term rate differentials have actually moved in favor of the euro, offsetting the negative impact on fair value from lower equities and oil, the currency strategist says. The euro's decline is entirely driven by a stronger dollar, he says. Buying the euro looks risky for now but a decline to new lows is unlikely unless the short-term rate differential widens in favor of the dollar, he says. The euro falls on Thursday, matching Wednesday's eight-week low of $1.1367, LSEG data show. A $1.1430-$1.1450 level would be more in line with the current environment, Pesole says.
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