EUR/USD could test 1.0500 at some point – SocGen
|The FX market’s sensitivity to central bank policy continues to amaze Kit Juckes, Chief Global FX Strategist at Société Générale.
Dollar could be in for 2-3% more upside from here
If the market embraces the idea that the Fed’s projection of three cuts this year is what’s going to happen, then the Dollar’s in for 2-3% more upside from here, and EUR/USD could test 1.0500 at some point.
In practise, of course, there are two sides to the argument and the ECB’s pushing back at rate cut expectations every bit as hard as the Fed is. So too, are most central bank policymakers, except for the BoJ, whose Deputy Governor is stressing that an end to YCC and negative rates would not signal the start of a series of policy moves.
I doubt the end of YCC and negative rates can be achieved without some upward pressure on the Yen, but clearly, the move from USD/JPY 152.00 to 127.00 in late 2022/early 2023 has left scars.
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.