The consensus believes in EUR/USD to parity and a Sept Fed hike

FX survey from SocGen

SocGen is out with the results of a survey for a fairly even composition of their clients (corporates, hedge funds, etc) with regarding to mainly their expectations for the ECB, the Fed, along with their current EUR/USD trading strategies. The following are a selection of some of the key results from this survey:

EUR/USD. Investors believe that the ECB is targeting parity and do the same but the downside targets are now less aggressive while top side targets are rising. Trading behaviour is relatively unchanged. 63.3% are sellers of EUR/USD on rallies and 12.7% are buyers on dips.

ECB. The market expects the end of ECB QE in Q3 2016 and the first rate hike in H1 2018 but with a significant amount expecting it as early as Q1 2017.

Fed. The market expects clearly the first rate hike in September and believes that the Fed rate hikes will be slower than what is priced in. The market is mostly neutral in its duration with a distribution evenly split between long and short.

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