- Analytics
- News and Tools
- Market News
- EUR/USD: It is about rates, more than growth – SocGen
EUR/USD: It is about rates, more than growth – SocGen
The Dollar ekes out modest gains from US exceptionalism. Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes FX market outlook.
Correlation between FX and rate differentials remains strikingly strong
Another week started with a barnstorming US data point, ISM services coming in strong, and the employment index, which was worryingly weak a month ago, bouncing right back. US exceptionalism is in fine fettle. Meanwhile, another Wednesday means another lousy German industrial production report. It was sunny in Munich and it’s raining in Frankfurt, but gloom about the economic outlook is the same in both cities.
In the FX market, this all translates into a slightly stronger Dollar, but the correlation between FX and rate differentials remains strikingly strong, so if strong data don’t move Fed expectations much, they won’t have as big an FX impact as they might otherwise.
US yields have risen slightly more in the last week than European ones, and EUR/USD is lower, but not that dramatically. If we are in thrall to rates, the medium-term question is still whether the Fed eases by more than the ECB, rather than how strong the US economy is.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
