FX Week 7 July 2013

FX Week


Conditions are aligning for further USD strength


Events at the end of last week provided further support for our long-term bullish USD outlook, as strong US data benefited US yields thus giving the greenback a firm fundamental underpinning, whilst the messages from the ECB and the BOE undermined the recent resilience of the EUR and GBP. One week into H213, the stars are aligning that should propel major currency pairs towards our 3-month targets of EUR/USD1.25, USD/JPY105 and GBP/USD1.48. Indeed all of our 1-month forecasts set out in our June Monthly Insights publication have now been met, and the DXY dollar index is making new highs for the year.

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