FXStreet (Guatemala) - Derek Halpenny, European Head of GMR at the Bank of Tokyo-Mitsubishi UFJ, Ltd explained that the euro is likely to remain under some modest downward pressure against the US dollar ahead of the FOMC’s upcoming policy meeting on the meeting on the 17th September.

Key Quotes:

"There is a risk that market participants may become less comfortable that the Fed won’t begin to raise interest rates which could lift the US dollar heading into the meeting. The latest economic data releases have revealed further improvement in US labour market conditions which has been cited as one trigger for beginning to raise interest rates. Some further stabilization in financial market conditions would likely prove supportive as well for the US dollar by lifting US rates."

"The latest US retail sales and CPI reports for August will be released ahead of the FOMC meeting but are unlikely to materially impact their upcoming decision limiting their impact on the US dollar. Risk sentiment continues to remain the main driver of euro direction in the near-term. If financial market conditions stabilize some more in the week ahead it will likely weigh modestly on the euro."

"The ECB’s recent strong signal that it has moved closer to easing policy will continue to weigh on the euro, although it will have drawn some comfort from the upward revision to economic growth in the euro-zone recorded in Q2."