28 Nov 2014
EUR/USD and USD/JPY treading water – Danske
FXStreet (Barcelona) - The Danske Research Team note that while there has been lots of action in commodity currencies that are under pressure from the decline in oil prices, the big crosses are mostly treading water currently.
Key Quotes
“EUR/USD has been broadly flat during November, partly due to stretched positioning as investors are very long the USD.”
“Relative economic surprises are also turning less in favour the USD, as US data has become a little more mixed, while euro area indicators show signs of bottoming.”
“However, as we move closer to the first Fed hike and the short end of US reprices, we should see a resumption of the decline in EUR/USD and we target 1.20 on a six-month horizon.”
“The JPY weakness has also stalled this week following a very rapid move higher in USD/JPY. Minutes from the latest Bank of Japan meeting suggested a low probability of more easing and pointed to some negative factors of too much JPY weakening.”
“We still believe though that the direction is for a weaker JPY in the short term as, among other things, the USD should strengthen further when we move closer to a Fed hike.”
Key Quotes
“EUR/USD has been broadly flat during November, partly due to stretched positioning as investors are very long the USD.”
“Relative economic surprises are also turning less in favour the USD, as US data has become a little more mixed, while euro area indicators show signs of bottoming.”
“However, as we move closer to the first Fed hike and the short end of US reprices, we should see a resumption of the decline in EUR/USD and we target 1.20 on a six-month horizon.”
“The JPY weakness has also stalled this week following a very rapid move higher in USD/JPY. Minutes from the latest Bank of Japan meeting suggested a low probability of more easing and pointed to some negative factors of too much JPY weakening.”
“We still believe though that the direction is for a weaker JPY in the short term as, among other things, the USD should strengthen further when we move closer to a Fed hike.”