Rates to peak in September, Dollar should be lower by then – SocGen

Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes FX market. Re-pricing peak Fed Funds keeps on supporting the Dollar, but by September, the greenback should ease.

EUR/USD is finding a base

“By the time rates peak – markets think in September, the Dollar should be lower. For now, they are busy revising that peak higher.”

“We think EUR/USD is finding a base here, partly because the US rates market has priced a lot in now, and partly because the European rates market has more to price in.”

“The USD/JPY 200-DMA is at 137.70 and if that were to break, it would trigger a spike down for the yen, at least temporarily.”

“As for Sterling, Andrew Bailey’s comments yesterday took the wind out of its sails. EUR/GBP is in a slow and erratic uptrend, but I could do with a Sterling pop higher before I head to the mountains at the weekend.”