US: 2Q activity story gives USD a little support – ING

After 3 months of disappointing activity data releases, the US this week could be turning a corner, according to the analysts at ING.

Key quotes

“The June ISM was stronger than expected yesterday and after today’s July 4th holiday, we should see a set of positive figures culminating in Friday’s release of June NFP. This should question whether the market is correct to price in merely a 30% chance of a September Fed hike. The US rate curve stands to be lifted further, perhaps more from the short-end now, which should keep the likes of USD/JPY supported. And barring any fresh geo-political challenges (e.g. N. Korea tested another missile overnight), we favour USD/JPY working its way towards the 115 area over coming weeks. However, DXY more weighted towards European currencies & favour correction stalling at 96.30/50.”