Credit Agricole: FOMC to be positive for USD – eFXnews

FXStreet (Barcelona) - According to Credit Agricole, the June FOMC Meeting would present a positive tone for rate hikes which would support the USD and drag EUR/USD lower, as noted by eFXnews.

Key Quotes

“The impact of the Eurogroup’s failure to achieve a Greek settlement over the weekend will be temporarily supplanted as investors turn their attention towards tomorrow’s FOMC announcement. We remain USD bulls as the FOMC should strike a more constructive tone raising rate hike expectations. Latest soft US data have not changed our opinion.”

“To the contrary, our call remains for Fed lift-off in September with a bias towards further FOMC front-loading. Such front loading behaviour post-FOMC should push USD funding costs higher thereby dragging EUR/USD lower. Even USD/JPY should be ‘pulled off the side-lines’ after Kuroda’s overnight clarification to see the pair re-test and then break 124.0 in the week ahead.”

“..we envisage such selling could quickly reemerge before 1.15 in EUR/USD and 1.30 in EUR/JPY.”
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