Week Ahead: EUR To Gain, USD To Consolidate, GBP A Sell On Rallies

Credit Agricole CIB outlines its view on USD, EUR, and GBP for the week ahead.

On the EUR front, CACIB argues that abating political risks, growing Eurozone rates and core EGB yields seem to point at stronger EUR, especially if the French polls show no shift in the voter intentions. In that regard, CACIB advises selling EUR/USD rallies close to 1.08 (see here). 

On the USD front, CACIB  expects next week’s US data to help USD to consolidate. Bigger picture, CACIB maintains its structural bullish view on USD and expects renewed gains across the board as the Fed continues its gradual policy normalization.  . 

On the GBP front, CACIB expect next week's UK data to show further acceleration of UK inflation but argues that this should not be seen as an overly positive development given the recent drop in real earnings. Strategy-wise, CACIB advises that GBP remains a sell on rallies.

Source: Credit Agricole CIB Research