USD: Mixed bag – Danske Bank

Friday’s US jobs report was a good one for risk sentiment but for USD it was a mixed bag, according to Chief Strategist, Valtteri Ahti at Danske Bank.

Key Quotes

“On the one hand, inflation is missing, which leaves the Fed in no hurry to get more hawkish; on the other, jobs growth is good, i.e. no clear direction for the USD on the back of this. This week, we expect the focus in majors to continue to be on retaliation measures from the EU and China notably and, in our base case, that protectionist measures are done on a case-by-case basis (and not a full-blown trade war), we still deem that this is situation is going to weigh on USD."

"EUR crosses will further have to cope with the continued uncertainty following last weekend’s eurosceptic shift at the Italian election, where further clarification is not likely until later this month.”