EUR/USD: Fed should help for another visit to 1.15 - Danske Bank
|Next week, the Federal Reserve will meet. According to analysts from Danske Bank, continued Fed hikes should help EUR/USD revisit the 1.15 area again during the course of the autumn.
Key Quotes:
“With the Fed set to stay on autopilot for now, US rates are set to stay a source of USD support. This should help cement the status of the dollar as a carry currency both in terms of the level of and the change in short-end yields.”
“With the Fed still keen to continue the process of moving rates back towards ‘neutral’, it remains too early in our view for the FX market to price the Fed going on hold. This should help EUR/USD revisit the 1.15 area again during the course of the autumn.”
“As the ECB is set to signal a first hike coming up at a time where the Fed could be looking to go on hold, a EUR/USD uptick will start to materialise. Indeed, it is when easing stops – rather than when hikes occur - that currency appreciation is seen, and vice versa.”
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