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Jan 09 - 06:55 PM

EUR/USD: We Look For EUR/USD To Revert Lower Over The Coming Weeks - Danske

By eFXdata  —  Jan 09 - 03:00 PM

Danske Research sees a scope for a top-and-turn in EUR/USD over the coming weeks.

"The market remains split over whether Fed hikes 25 or 50bp at the upcoming FOMC meeting in February and Friday's jobs report did little to change this. We expect Fed members to correct market pricing in either direction ahead of the meeting, but likely not before after December's CPI due Thursday," Danske notes. 

"Uncertainty about the size of Fed's next rate move makes for quite a wide outcome space for short-term USD rates and EUR/USD over the next 1-2 weeks.

We still favour Fed to hike 50bp in February with the main arguments being a still tight labour market, a likely rebound in core CPI looks to around 0.3-0.5%m/m and hawkish Fed comments recently. Hence, we see potential for EUR/USD to revert lower over the coming weeks," Danske adds.

Danske Research/Market Commentary


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