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EUR/USD - The Royal Bank of Scotland predicted 1.05 target

29 July 2015, 09:11

Sergey Golubev

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The Royal Bank of Scotland predicted the price for EURUSD as 1.05 1-year target, and those are the 5 key factors from RBS:

"None of this has much directly to do with Greece."
"Other factors that support some renewed fall in EUR/USD this year: faster money positioning in EUR/USD is now much cleaner than it was a few months ago, short EUR/USD is a far less crowded trade."
"The German government bond market, which went into price melt-down in March, raising serious risks to other most owned positions like short EUR/USD, has stabilised."
"Oil prices are falling again steadily."
"Another key variable is US data and the US Federal Reserve. Informing our EUR/USD lower view is the assumption that the Federal Reserve makes its first tightening move in September his year. That is a close call. But a September rate cut is not fully priced and -if manifest - could give the Dollar a boost into Q4."

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Sergey Golubev 2015.07.29 10:05 #1

Sergey Golubev, 2015.07.29 11:58

Credit Agricole - 'The Fed in our view is unlikely to pre-commit to a September rate hike at today’s meeting' (based on efxnews article)

"The Fed in our view is unlikely to pre-commit to a September rate hike at today’s meeting. Instead, it is more likely to remain data dependent, noting a cautiously upbeat assessment of progress on its dual mandate. Indeed, its statement will likely reflect the strength of the labour market, indicating the absorption of slack and the tentative signs of wage pressure."
"Any shift in the FOMC’s statement will likely drive the FX market’s response."
"The biggest losers will likely remain commodity currencies and those with large external imbalances."
"We think any pullback will be short-lived, especially given that markets still have plenty of data to digests before the September meeting."