EUR/USD potential for a correction lower near term – Danske Bank

Chief Analyst at Danske Bank Jens Sorensen believes the pair could see a Fed-led leg lower in the very near term.

Key Quotes

“After the significant upward move in EUR/USD last week, we are now in wait-and-see mode ahead of the Fed meeting tomorrow. We see the risks skewed slightly to the downside going into the meeting, as we think that relative rates still have a role to play, notably if the Fed signals a more hawkish stance with regard to 2018”.

“However, given the still uncertain outlook with regard to fiscal policy in the US (the US government is expected to submit the key parameters of the 2018 Budget to Congress on Thursday, i.e. the day after the Fed meeting), we think that the Fed will remain cautious on monetary policy”.