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US Dollar rebound has more room to go until data worsens – MUFG

USD rebound is unfolding given the richness of US rates curve. Economists at MUFG Bank analyze Greenack’s outlook.

EUR/USD could move back down to around the 1.06/1.07 area in February

While inflation is falling quite quickly now for the FOMC to cut we will need to see some clearer evidence of a deteriorating labour market that would prompt increased fears of recession. That of course may well come in either the February or March payrolls reports but if not in February we may well see a full retracement of the EUR/USD rally in November/December, taking spot back down to around the 1.06/1.07 area.

The Dollar sell-off into year-end looked overdone and hence there remains scope for further USD strength, especially on days like Tuesday when we see bigger jumps in yields.

 

AUD/USD is at a key support area above 0.6500 with US Retail Sales, Fed speakers on tap

The Aussie is under increasing bearish pressure amid the unfavorable risk environment Hawkish Fed rhetoric is prompting investors to reassess Fed easing expectations and boosting the US Dollar.
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EUR/CHF set to correct back up to the 0.95/0.96 area – ING

EUR/CHF clawed back losses last week. Economists at ING analyze the pair’s outlook.
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