13 Jul 2015
EUR/USD door open for further weakness – BTMU
FXStreet (Edinburgh) - Derek Halpenny, European Head of GMR at BTMU, still sees the pair resuming its downside in the medium term.
Key Quotes
“One reason why we think EUR/USD is likely to fall is that avoiding Grexit will result in the Fed moving to raise rates later this year – something market pricing shows is not correctly priced anymore”.
“Fed Chair Yellen spoke on Friday evening and repeated that lift-off on rates would be appropriate later this year”.
“Importantly in stating that a rate increase was likely at “some point this year” she then added that developments could push the timing back or bring the timing forward”.
“In other words, Yellen offered a balanced risk bias despite the crisis in Greece and the equity market turmoil in China”.
“That to us highlights a growing belief within the Fed that a move in rates is becoming increasingly justified”.
“That stance was echoed by Cleveland Fed President Mester (non-voter this year; voter next year) in an interview with the FT who argued that the US economy no longer needed an emergency level of interest rates”.
Key Quotes
“One reason why we think EUR/USD is likely to fall is that avoiding Grexit will result in the Fed moving to raise rates later this year – something market pricing shows is not correctly priced anymore”.
“Fed Chair Yellen spoke on Friday evening and repeated that lift-off on rates would be appropriate later this year”.
“Importantly in stating that a rate increase was likely at “some point this year” she then added that developments could push the timing back or bring the timing forward”.
“In other words, Yellen offered a balanced risk bias despite the crisis in Greece and the equity market turmoil in China”.
“That to us highlights a growing belief within the Fed that a move in rates is becoming increasingly justified”.
“That stance was echoed by Cleveland Fed President Mester (non-voter this year; voter next year) in an interview with the FT who argued that the US economy no longer needed an emergency level of interest rates”.