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According to Mark McCormick, North American Head of FX Strategy at TD Securities, the major currencies are sitting in a holding pattern awaiting the next impetus.

Key Quotes

“We think it is the Fed, though the recent spike in oil has raised some eyebrows. The next move in oil matters insofar as it offers a good reason to keep the selloff in global rates moving, especially as global output gaps are closing.”

“This is more likely to benefit the ROW than the USD, given there is more room for a deeper selloff in the like of bunds.”

“The EUR has tracked bunds more closely than USTs, which also point to 1.20 on a break of 1.18. We also think EURCHF has room to run higher as CHF looks quite rich at current levels that also favors downside in CHFJPY.”

“For the rest of the majors, the Fed will lift or sink all boats so G10 view over the coming days hinges on a possible dovish reaction. GBP is still doing its own thing on Brexit headlines but a softer USD would reinforce a floor near 1.30.”