Mark McCormick, North American Head of FX Strategy at TD Securities, explains that the recent stream of news flow has conspired against the USD, reflecting the perceived dovishness of Powell’s comments at JH, the recent developments in Washington and the turn in data momentum.
Key Quotes
“European currencies seem the best placed to benefit from a turn in the USD.”
“Our dashboard doesn’t suggest a strong overweight in the EUR just yet, though the conviction on USD strength is starting to wane.”
“A loss of data momentum and flattening yield curve against the majors don’t help. Recent moves by the Chinese aimed at stability in CNH argue that EURUSD remains a buy on dips.”
“The critical test of the short-term EURUSD setup is 1.17.”
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