The Yuan will weigh the Euro down if it falls further – SocGen

The biggest contributor to the Euro’s rise since September has been the Yuan. Kit Juckes, Chief Global FX Strategist at Société Générale, expects USD/CNH to dictate the path of EUR/USD.

EUR/USD, anchored by the Yuan, hurt by lack of growth

The USD/CNH stalling gives the Euro some support in the face of headwinds it faces from market positioning (long), recent European data (weak) and fading expectations of further ECB rate hikes beyond September. 

Where USD/CNH goes next may decide whether EUR/USD spends August below 1.10 or re-testing 1.13.