MUFG summary via eFX.
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- Current Tight Trading Range: MUFG notes that EUR/USD has been trading within a narrow range of 1.0500 to 1.1000, supported by their short-term valuation model that takes into account yield spreads, equity market performance, and energy prices.
- Downward Pressure on EUR/USD: MUFG expects EUR/USD to gravitate towards the lower end of the aforementioned range. They attribute this to various short-term fundamentals that include yield differentials and other economic variables.
- Temporary Lift from ECB Hike: MUFG acknowledges that an ECB rate hike next week could provide a brief respite for the euro, but they believe this effect would be temporary.
- Consistent View on USD: The bank's forecast aligns with their updated view that the USD is likely to remain strong for the rest of this year.
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As an update for the opening of the week, the USD is a touch weaker across the board with USD/JPY shunted lower on Ueda's comments made Wednesday and reported over the weekend.
in chronological order:
- Bank of Japan Governor Ueda says his focus is on a 'quiet exit' reducing monetary easing
- USD/JPY indicating a big figure lower than Friday after 'exit' comments from BOJ Gov Ueda
- More on Bank of Japan Governor Ueda weekend comments sending USD/JPY 100 points lower
4.BOJ Gov. Ueda weekend remarks indicating BOJ focus will now be on “a quiet exit”
