Credit Agricole CIB FX Strategy Research notes that the EUR was in demand for most of the week, mainly in reaction to ECB President Draghi making a bigger case of removing stimulus in an environment of improving growth conditions.
"Most importantly, he explained that temporary factors would keep inflation down while suggesting that price expectations are well anchored. From that angle investors’ focus may shift back to measures such as 5Y inflation swaps for evaluating the ECB’s monetary policy stance going forward," CACIB adds.
"Ahead, next week, it will be quiet in terms of market moving data releases. Final June PMIs offer only limited surprise potential. Accordingly, we expect majors such as EUR/USD to be predominantly driven by the USD leg next week. Hence, US business activity and labour data will be key," CACIB argues.
Source: Credit Agricole CIB ResearchOriginal Article
