Can the euro finally seal the deal on a firm break above 1.1000 against the dollar? That's going to be a key question ahead of the weekly close this week. Here's the levels that you should be mindful before tomorrow's close.
The week so far has been filled with plenty of pushing and pulling. At the end of last week, markets were convinced of a 25 bps rate hike by the Fed. Right now, Fed funds futures are indicating a roughly 77% probability.
I wouldn't say that means traders are not certain of what the Fed will do next week but this looks more like a reflection of more dovish expectations in the months ahead. If you take a look at the implied rates pricing:
We're now closer to where the pricing was on 13 April, which was right as the banking turmoil settled down, than on 19 April last week - that was when markets were fearing inflation would be more sticky down the road.
With month-end trading also in focus, we might not get much clarity ahead of the weekend and in fact maybe not until we get to the Fed next week.
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