USD Expected to Gather Traction in the Next Months – Danske Bank
USD Expected to Gather Traction in the Next Months – Danske Bank
Analyst at Danske Bank Mathias Mogensen sees the dollar edging higher in the upcoming months.
Key Quotes
“The ECB delivered no surprises on Thursday, which meant relatively limited action in EUR/USD:
Draghi did keep the door open for additional rate cuts but signalled
the ECB still prefers other instruments (such as QE) over rates and thus
echoed the March closure of the currency war”.
“This essentially leaves the euro area free not to worry about rate cuts for now”.
“Focus
now turns to the Fed meeting on Wednesday; we expect rates unchanged
but emphasise the potential for another round of EUR/USD downside as
speculators are now on the whole broadly square the greenback according
to CFTC data and hence the potential for relative rates (which we see
moving in favour of the USD ahead of a September hike) to play a role again for a while has returned”.
