12 May 2014
EUR/USD peaking? – Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, believes the pair is in a process of peaking.
Key Quotes
"Another Refi Rate cut is now likely at next month's ECB meeting. That seems a reasonable interpretation of Mario Draghi's comments last week."
"On Friday I observed that this may amount to little more than a hill of beans and that still feels like the right interpretation. EUR/USD fell from 1.38 to 1.35 in the 2 weeks before the ECB last cut rates in early November, fell below 1.34 on the news, but was back at 1.38 by mid-December."
"That may be a decent blueprint for the next few weeks, with a drift lower in EUR/USD, particularly if 2yr Euro rates can break out of the 0.42-0.55% range of the last 6 months. But while I still think EUR/USD is in the process of peaking, the most likely catalyst for a durable turn in the trend is a push higher in US (market) rates, as Fed tightening draws clsoer."
Key Quotes
"Another Refi Rate cut is now likely at next month's ECB meeting. That seems a reasonable interpretation of Mario Draghi's comments last week."
"On Friday I observed that this may amount to little more than a hill of beans and that still feels like the right interpretation. EUR/USD fell from 1.38 to 1.35 in the 2 weeks before the ECB last cut rates in early November, fell below 1.34 on the news, but was back at 1.38 by mid-December."
"That may be a decent blueprint for the next few weeks, with a drift lower in EUR/USD, particularly if 2yr Euro rates can break out of the 0.42-0.55% range of the last 6 months. But while I still think EUR/USD is in the process of peaking, the most likely catalyst for a durable turn in the trend is a push higher in US (market) rates, as Fed tightening draws clsoer."