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10 Apr 2015
Time for next leg down in EUR/USD – Danske
FXStreet (Barcelona) - With FOMC Minutes suggesting a Fed hike remains on the cards in this year, and US economy expected to improve, the Danske Bank Research Team expects EUR/USD to head towards parity in the coming months.
Key Quotes
“We believe the next leg lower in EUR/USD is imminent. The FOMC minutes suggest that a hike some point in the period June-September is very much on the table and at the same time we expect US data to improve in the coming weeks and months following the recent soft spot.”
“The underlying strength of the US economy was witnessed in the low reading for US jobless claims this week which took the four-week moving average to a new post-recession low – and the lowest level in 40 years.”
“At the same time wage growth has started to move up pointing to a tightening labour market which will make the Fed more confident that inflation is heading for the target of 2% in the medium term.”
“As the US surprise index starts to move higher this should give renewed tailwind to the USD and we look for EUR/USD to head for parity over the coming months.”
Key Quotes
“We believe the next leg lower in EUR/USD is imminent. The FOMC minutes suggest that a hike some point in the period June-September is very much on the table and at the same time we expect US data to improve in the coming weeks and months following the recent soft spot.”
“The underlying strength of the US economy was witnessed in the low reading for US jobless claims this week which took the four-week moving average to a new post-recession low – and the lowest level in 40 years.”
“At the same time wage growth has started to move up pointing to a tightening labour market which will make the Fed more confident that inflation is heading for the target of 2% in the medium term.”
“As the US surprise index starts to move higher this should give renewed tailwind to the USD and we look for EUR/USD to head for parity over the coming months.”