EUR/USD vigilant on the FOMC meeting – Danske Bank

Senior Analyst at Danske Bank Jens Pedersen expects the pair to stay wary ahead of the FOMC meeting this evening in Europe.

Key Quotes

“While EUR crosses should keep an eye on tonight’s French presidential election debate, we do not think this will be able to impact FX markets much given the firm (albeit slightly shrinking) Macron lead in the polls”.

“Rather, EUR/USD will stay tuned on the FOMC statement this evening and while we expect little in the way of new policy initiatives, there is a clear risk that the Fed in its statement could touch upon ‘quantitative tightening’ to test the market sensitivity to this ahead of the June meeting; this could weigh on the cross as it will be difficult for the Fed to initialise a discussion of this without making the market nervous regarding the degree of policy accommodation”.

“We still look for 1.06-1.10 but we can no longer rule out a move above this level should Friday’s US job report be weak and/or following a Macron win”.