USD expected to gain ground - RBS

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Barcelona) - Greg Gibbs, FX Trading Strategist at RBS, sees the USD gaining bullish momentum in the next periods.

Key Quotes

"As we approach the FOMC minutes we see increasing risk that recent yield rises in the US could filter down the curve and recent yield falls in the Eurozone could filter up the curve. We already see the deep falls in the EUR/USD yield spread as sufficient to support a developing downtrend in the EUR and expect further yield moves to generate a case for a lower EUR."

"Similarly, we note yield spreads moving in favour of the USD/JPY. There is a range of other distractions that may delay currencies' response to developing rate moves, but we stay true to our view that the USD should rise further vs. the EUR and JPY, and this may eventually spread to other markets."

"There is no let-up in the fall of iron ore prices and the RBA continues to take a leaf out of the Fed's playbook, guiding rates low for an extended period. This is helping to cap the AUD at recent highs."

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