If US ISM is not soft, the Euro is in trouble – SocGen

The Dollar is stronger against the Euro as we await the big events of the week – the FOMC on Wednesday, ECB on Thursday, and Bank of Japan on Friday, economists at Société Générale report. 

Euro market is uncertain about whether there will be another hike in September

The consensus call is for 25 from the Fed and ECB, nothing from the BoJ, and we may have to stare deeply into the comments of central bankers to get any clarity about the odds of further moves. However, the Yen market thinks a YCC change is coming (some sunny day), the Euro market is uncertain about whether there will be another hike in September after Mr. Knot’s intervention (and the PMI data), and the US market is likewise unsure. 

As the Eurozone PMI vs US ISM suggests, if US data are ‘OK’ the Euro is likely to drift lower for now.