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USD/CHF Vulnerable If Global Uncertainty Accelerates

Published 08/24/2015, 08:43 AM
Updated 05/14/2017, 06:45 AM
EUR/USD
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The latest IMM data cover the week from 12 to 18 August 2015.

While EUR/USD became a slightly less stretched pair according to IMM positioning in the week to 18 August - and this may have continued after the relatively soft FOMC minutes later in the week - we stress that the cross remains challenged on the downside, as short the pair remains a crowded trade still. We have recently postponed our call for a first Fed hike and FX markets are likely to continue to speculate that a hike may not arrive this year after all, which limits the potential for EUR/USD downside near term, see Research US: Uncertainty set to keep Fed's finger off the trigger in September for details. While positioning is an obstacle, we emphasise that the ECB has certainly seen policy challenges mount as well and is expected to point to the possibility of more easing if needed.

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