EUR/USD: Fed rate hike expectations prevail again
Currencies
EUR/USD
During summer, EUR/USD held a tight sideways range as the relative policy shifts between the Fed and ECB were limited. Currently, Fed rate hike expectations prevail again, pushing EUR/USD lower in the range.
EUR/GBP
Sterling was hammered immediately after the Brexit vote. The UK economy withstood the first Brexit shock well, but the prospect of further BoE easing and uncertainty on a "hard Brexit" keep sterling in the defensive.
USD/JPY
The yen didn't weaken after the September BOJ policy meeting. However, USD/JPY finally gained ground on overall USD strength as US bond yields trended higher. A break above first resistance at 104.32 didn't occur.
EUR/NOK
The Norwegian Krone strengthened as higher inflation reduced the chances for further policy easing. Rising oil prices helped the pair return to the EUR/NOK 9.00.barrier.
EUR/PLN
The zloty rebounded as market fears on the appointment of new NBP members by the government eased. The fundamentals are modestly PLN supportive. The zloty probably won't lose any further interest rate support anymore.
EUR/HUF
The forint was already better bid earlier this year as the MNB easing cycle halted. The currency was additionally supported by improving economic fundamentals. This improvement was illustrated by a credit rating upgrade.
Author
KBC Market Research Desk
KBC Bank
