EURUSD 1 hour
The US dollar is struggling today despite higher Treasury yields as dollar positioning is re-calibrated following the comments on the weekend from Ueda.
The market isn’t sure what to do ahead of a difficult ECB decision. The tone around the table is likely to be contentions with hawks and doves digging in ahead of the meeting. Current market pricing is 60% towards a hold and 40% for a 25 bps hike to 4.00%.
The rally in the euro today may reflect euro shorts heading to the sidelines rather than wanting to sweat out the Sept 14 decision. Today’s % m/m drop European calendar was light, though we did see a 0.7% drop French industrial output -0.3% expected.