FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, sees potential for a shift in sentiment towards the USD.
"We continue to see EUR rates sliding and curve flattening weakening the EUR. BoE Governor Carney, in my view, gave a clear warning to the market to prepare for a rate hike sooner than currently priced."
"We suspect this posture shift may be mirrored at the Fed and may become apparent at the next FOMC meeting on 19 June. Rate rises are likely to come into clearer vision in the US soon and support the USD."
"We see opportunities to be short EUR and JPY and long USD and GBP to reflect yield developments."
"We see potential for a bigger shift in sentiment towards the USD since the market is currently still too focused on the short term outlook for rates, in my view. It is possible that a stronger USD against other majors helps it firm up more broadly in coming months."