On the build-up of Fed rate cut speculation, EUR/USD has risen to a 5-month high and towards the top of the trading range that has dominated all year. On the anticipation that the panicked market conditions will ease over the coming sessions, we continue to see a sustained break above EUR/USD1.10 as unlikely at this point, Rabobank’s FX analyst Jane Foley notes.
EUR/USD is set to hold above 1.10
“EUR/USD has essentially been contained within a 1.10 to 1.06 range all year. The US Dollar (USD) had already been on the back foot through most of July as the market priced in a September rate cut from the Fed. At the end of last week, Fed rate cut expectations boiled over and fuelled the rally in EUR/USD. This has left the EUR as the third best performing G10 currency on a 1-day view after the JPY and the CHF.”
“As long as the market believes that they will not trigger contagion in broader Eurozone markets, the impact is likely to be contained. In our view, the USD is likely to continue dominating the direction of EUR/USD. It follows that US news will create the biggest risk factors as to whether EUR/USD can hold levels above 1.10 before the end of this year.”
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
Hot
No comment on record. Start new comment.