23 Jul 2015
EUR/USD changing hands on relative fundamentals - BTMU
FXStreet (Guatemala) - Analysts at Bank of Tokyo Mitsubishi UFJ explained that the euro has come back under modest downward pressure against the US dollar as the foreign exchange market has shifted back to being driven by relative fundamentals.
Key Quotes:
"The risk of a negative shock from a Greek default and Grexit in the near-term has eased as the Greek government moves closer to securing a third bail out from its creditors. The Greek government expects talks to begin this week on the third bail out after it passed two sets of reform legislation this week. It is hoped that a final agreement will be reached soon before the Greek government’s next repayment is due to the ECB on the 20th August."
"The release of the latest euro-zone PMI surveys for July will be scrutinised to see if the recent uncertain developments regarding Greece have at least temporarily negatively impact business sentiment within the euro-zone. The US dollar is regaining upward momentum more broadly ahead of the first Fed rate hike which is still expected this year."
"The FOMC may present a modestly more upbeat assessment of the US economy at their policy meeting in the week ahead although still likely refrain from giving a clear signal as to whether they will begin to raise rates in September. The release of the Q2 GDP report should confirm that the US economy has returned to more solid growth."
Key Quotes:
"The risk of a negative shock from a Greek default and Grexit in the near-term has eased as the Greek government moves closer to securing a third bail out from its creditors. The Greek government expects talks to begin this week on the third bail out after it passed two sets of reform legislation this week. It is hoped that a final agreement will be reached soon before the Greek government’s next repayment is due to the ECB on the 20th August."
"The release of the latest euro-zone PMI surveys for July will be scrutinised to see if the recent uncertain developments regarding Greece have at least temporarily negatively impact business sentiment within the euro-zone. The US dollar is regaining upward momentum more broadly ahead of the first Fed rate hike which is still expected this year."
"The FOMC may present a modestly more upbeat assessment of the US economy at their policy meeting in the week ahead although still likely refrain from giving a clear signal as to whether they will begin to raise rates in September. The release of the Q2 GDP report should confirm that the US economy has returned to more solid growth."