EUR/USD to remain steady, if Fed leaves rates unchanged – BTMU

FXStreet (Córdoba) - Analysts from The Bank of Tokyo-Mitsubishi UFJ, consider that EUR/USD could remain stable if the Federal Reserve leaves rates unchanged.

Key quotes:

“The US dollar is trading on the defensive heading into the FOMC meeting in part reflecting the perceived risk of a dovish surprise. We expect the Fed to leave its key policy rate unchanged although it is likely a closer call than currently discounted by the market.”

“However, it is unlikely that the Fed will provide a more dovish outlook for the Fed funds rate than currently discounted by the US interest rate market helping to dampen scope for further US dollar weakness in the near-term.”

“If investor risk sentiment continues to gradually improve after the FOMC meeting, the US dollar is likely to retrace more of its losses recorded against the euro in the aftermath of the renminbi devaluation shock. The upcoming Greek parliamentary election at the weekend is unlikely to materially impact the euro in the week ahead.”