Societe Generale Research discusses EUR/USD and USD/JPY outlook and maintains a neutral bias in the near-term.
"The dollar's burning it up again, even if the strongest of the major currencies overnight is actually the yen, which summarises the rather mixed moods of markets. To be fair, both EUR/USD and USD/JPY are both firmly locked into ranges, but the strength of the US non-manufacturing ISM yesterday presents a stark contrast with the relative gloom elsewhere," SocGen notes.
"The Eurozone composite PMI did bounce, but compared to the ISM, it's very much of a lame duck variety. And everywhere else, the story is pretty downbeat, with Canadian and then Australian GDP succumbing to housing market gravity and prompting increased speculation that their central banks will be easing before the Fed gets around to acting. Indeed, we may yet have markets talking about Fed tightening while the rest of the global economy sinks into a hole," SocGen adds.