FXStreet (Edinburgh) – Senior Analyst Flemming Nielsen at Danske Bank expects the pair to visit the 130.00 area in the upcoming months.
Key Quotes
“According to our models, relative rates (higher US interest rates) and a lower oil price are the two main explanatory factors”.
“In particular, USD/JPY appears to be exposed to a short-term correction, not least as positioning data suggest that a good deal of JPY shorts were added last week”.
“Over the coming three to six months, our models suggest that relative rates ahead of a first Fed hike in September imply broad-based USD strength, projecting that EUR/USD will dip below parity in 3M (DBM 3M forecast: 1.08), USD/JPY will edge above 130 (3M forecast: 125), whereas GBP/USD should stay above 1.50 (3M forecast: 1.52)”.
(Market News Provided by FXstreet)