Barclays And The EUR/USD

Barclays maintain high conviction in further EUR/USD downside in the context of steadily improving US data and a likely September Fed rate hike that remains underpriced.

Barclays notices that there is only one more employment report to go so it seems plausible that the FOMC has already decided what to do in its next meeting. The question stays if wage pressures is not too soft and if the improvement of the labour market is significant enough to start the normalization.

However Barclays  believe, that in line with the FOMC’s rhetoric, that the expected path of the fed funds rate for the next couple of years is probably more important than the actual date of the lift-off.The wage growth should be monitored really carefully.