MUFG on the euro - see it 1.0950 / 1.1250 for this coming week
Comments:
- euro has broken lower against the US dollar
- key factor behind this has been mounting concerns over global growth
- The Fed's recent emphasis on the global economy suggests that building risk factors could weigh on their rate guidance, which could weaken the dollar
- But in this risk-off environment it seems more likely that the dollar will be supported
- Jackson Hole will be a key event to watch for signs that Fed Chair Powell may change his stance
- Comments by ECB Governing Council member Olli Rehn which suggest that the ECB could deliver a package of stimulus measures which could overshoot the market's expectations, will continue to weigh on the euro
- Rates markets are now pricing in a 75% chance of a 20bps cut in the deposit rate by September
