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4 Jun 2014
Upside potential in USD vs JPY and EUR - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, continues to see upside potential in USD vs. the JPY and EUR, suspecting that the momentum may potentially spread more broadly.
Key Quotes
"USD/JPY is currently testing a key resistance level around 102.65 and recently established support around 102."
"We expect the steady recovery trend in the US economy to bring rate hikes by the Fed into view soon, reinforcing the improving USD trend."
"Increasing speculation about Japan's GPIF shifting its asset allocation and a corporate tax hike in Japan may spur a reinforcing rally in Japanese equities."
"Japan labour earnings data continue to point to rising inflation expectations and lower real yields in Japan. The market is worried that an ECB policy easing is already priced in and EUR will rebound."
"However, we expect the ECB to fully deliver and the recent decline in EUR/USD yield spreads, noticeably at the short end of the curve (below one-year), to reinforce the recent fall in EUR. A lack of bounce in EUR post-ECB meeting may bring back sellers that are waiting for underwhelming (tepid) ECB policy easing."
Key Quotes
"USD/JPY is currently testing a key resistance level around 102.65 and recently established support around 102."
"We expect the steady recovery trend in the US economy to bring rate hikes by the Fed into view soon, reinforcing the improving USD trend."
"Increasing speculation about Japan's GPIF shifting its asset allocation and a corporate tax hike in Japan may spur a reinforcing rally in Japanese equities."
"Japan labour earnings data continue to point to rising inflation expectations and lower real yields in Japan. The market is worried that an ECB policy easing is already priced in and EUR will rebound."
"However, we expect the ECB to fully deliver and the recent decline in EUR/USD yield spreads, noticeably at the short end of the curve (below one-year), to reinforce the recent fall in EUR. A lack of bounce in EUR post-ECB meeting may bring back sellers that are waiting for underwhelming (tepid) ECB policy easing."