EUR/USD: momentum expected to go on – Danske Bank

Chief Analyst at Danske Bank Jakob Christensen sees the pair keeping it strong momentum for the time being.

Key Quotes

“In the majors, the recent EUR rally found justification in the strong European PMIs out yesterday, which essentially means that we have yet to see firm signs of the European business cycle peaking”.

“Thus, for now, the strong EUR momentum looks set to stick around. We still stress that the eurozone is unlikely to weather the global slowdown altogether and that PMIs may be peaking at present. This suggests that EUR bulls could eventually see a sanity check but this may take another few months”.

“Today, the market is unlikely to put too much weight on a possible hawkish tone in the FOMC minutes due for release today since the latest drop in inflation came after the latest FOMC meeting and seems to have spurred a more dovish tone in recent speeches from FOMC members. The next focal point for the EUR may therefore not come before next week’s euro area HICP inflation release”.