Euro is driving the currency  bus 

We were expecting a significant downside EONIA response to the weakening EUR, but the lack there off suggests the markets see a stronger probability of an ECB rate cut not QE at this stage.

So, with the market pricing in a ten bp ECB depo rate cuts in September and December, which suggest the FOMC have “out dove" the ECB's current messaging, as such the USD remains prone to further long liquidation.

Oil Things considered


Once the short-term effect from escalation tensions in Iran wane, and the market returns focus to global demand, commodity currencies could fall under pressure, but given the Greenback is in the middle of longer-term death throes these dips could provide an excellent buying opportunity notably if the worst case g20 scenarios are averted. Which remains the markets base case scenario?

I will follow up with Asia market after the CNY Fix as we remain on “Yuan Yuatch” (sic)

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