EUR/USD: Euro risks still skewed to downside in near-term – MUFG
|Lee Hardman, currency analyst at MUFG Bank, see that the Euro remains heavy with risks still skewed to downside in near-term. They expect EUR/USD to trade in the 1.0950-1.1200 range next week.
Key Quotes:
“The euro continues to trade close to recent lows against the US dollar with the pair potentially requiring a fresh catalyst to break below support at the 1.1000-level. The main event risk in the week ahead for the pair will be Fed Chair Powell’s speech at Jackson Hole. If Fed Chair Powell again fails to meet market expectations for more aggressive easing it could encourage a stronger US dollar in the week ahead. Market participants are expecting Chair Powell to strike a more cautious tone and express more concern over building downside risks from global growth over the summer period even if the incoming US data flow has held up better than expected.”
“The ongoing inversion of the US yield curve is concerning as well. In the Europe, the data flow has remained more disappointing although PMI surveys in August surprised to the upside. It keeps pressure on the ECB to deliver a package of easing measures next month which is weighing on the euro. It is too soon to expect a significant loosening of fiscal policy which would be more euro supportive.”
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