EUR/USD inter-markets: pointing to further rangebound

EUR/USD remains locked within a tight range today following the strong results from July’s Payrolls (255K). The absence of relevant releases in both Euroland and the US economy at least until Friday’s US Retail Sales and the Reuters/Michigan index should prompt the pair to remain in a consolidative pattern, with the broad RO-RO trends as the main drivers.

In the meantime, US money markets keep underpinning the upbeat momentum in the buck with yields across the curve extending the up move from Friday and the US Dollar Index flirting with highs in the 96.40 region.

Volatility gauged by VIX remains in depressed levels however, while Fed Funds futures prices stay on the rise, reflecting a change in market bets regarding the likeliness of a rate hike by the Federal Reserve at some point in the next months. In fact, CME Group’s FedWatch tool now shows the probability of higher rates in September at 15% (from practically near-to-zero levels a week ago) and at nearly 40% for the December meeting.

EUR/USD remains locked within a tight range today following the strong results from July’s Payrolls (255K). The absence of relevant releases in both Euroland and the US economy at least until Friday’s US Retail Sales and the Reuters/Michigan index should prompt the pair to remain in a consolidative pattern, with the broad RO-RO trends as the main drivers.

In the meantime, US money markets keep underpinning the upbeat momentum in the buck with yields across the curve extending the up move from Friday and the US Dollar Index flirting with highs in the 96.40 region.

Volatility gauged by VIX remains in depressed levels however, while Fed Funds futures prices stay on the rise, reflecting a change in market bets regarding the likeliness of a rate hike by the Federal Reserve at some point in the next months. In fact, CME Group’s FedWatch tool now shows the probability of higher rates in September at 15% (from practically near-to-zero levels a week ago) and at nearly 40% for the December meeting.