According to Jin10 data, strategist Mark Cranfield pointed out that the yen has dominated the headlines this month, but the baton will soon be passed to the euro, becoming the next driving force for global currency trends.
The euro/dollar looks set to rise in the coming weeks, which will help boost currencies in developed and emerging markets. Traders expect that in the coming months, the rate cuts from the Federal Reserve will exceed those from the European Central Bank.
Despite the significant rise of the euro/dollar in the past two months, leveraged positions are still skewed towards euro net shorts, indicating that there may be more euro short covering in the short term.
September will become a watershed for all asset classes, with the European Central Bank holding its meeting first, followed by the Federal Reserve and the Bank of Japan. Guidance from Europe may be the least dovish among the three, which will give the euro a tailwind.
