EUR/USD: Dollar looking increasingly vulnerable – MUFG
|Analysts at MUFG Bank point out the US dollar failed to benefit from stronger employment data in light of the Federal Reserve’s high hurdle for rate hikes.
Key Quotes:
“The USD appears increasingly vulnerable to a more marked correction lower in the near-term. USD weakness is becoming more broad-based with even EUR/USD threatening to break higher above the 1.1000 to 1.1200 range that has held since mid-year”
“The USD failed to derive upward momentum on the back of the blowout US employment report for November. The Fed’s stronger commitment to keep rates on hold through next year until there is a significant and sustained pick-up in inflation has weighed on the USD and further encouraged an improvement in global investor risk sentiment. At the same time, the sharp increase in the ZEW expectations component has reinforced optimism over the outlook for the eurozone economy heading into 2020.”
“While hard economic data remain disappointing so far in Q4, the improving leading indicators are signalling growth is set to strengthen next year and encourage a stronger euro even if the ECB remain committed to looser policy for longer. A US-China phase one trade deal and positive UK election outcome also play into a higher EUR/USD.”
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.