EUR/USD capped? Watching Fed and Brexit concerns - Scotiabank
|Analysts at Scotiabank noted that EUR/USD spot is little changed over the weekend.
Key Quotes:
"Lower US yields are undercutting the USD’s rate advantage versus the EUR (2Y bond spread lower at 125bps, the lowest in a month), providing the EUR with a little protection against the drag of the weak pound."
"The EUR may struggle to improve significantly, however, and we still think the downside is the weaker side of this market.
Firstly, UK concerns could easily spill over into the EUR – we would be surprised if they did not. Secondly, while the Fed is expected to remain on hold, the markets may react to implicit messaging from the Fed (statement, dot plot) which indicates higher rates are still likely this year."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.