The dollar struggles to maintain its advance. Société Générale economists analyze the outlook for the foreign exchange market.
Will further growth in China be enough to guide EUR/USD above 1.0635?
Whether the dollar holds or not may depend on whether prices for the December FOMC exceed 50%.
We are closely monitoring the technical aspects of the DXY as bullish momentum is showing signs of exhaustion and possible breakout.
Higher growth in China is implicitly positive for EUR/USD (balance of trade), but is it enough to guide the pair above 1.0635? We have our doubts and ideally we would need to see a significant pullback in UST/Bunds, better Eurozone data (weaker US numbers) and narrowing of the XCCY base. The 10-year spread is approaching 200 basis points, which is not a signal to add long positions in euros.
As for the 10-year UST yield, the possibility of reaching 5% depends on it being able to exceed 4.88%.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
