The markets have already priced in at least one rate hike and are beginning to price in the second rate hike by year-end. Combined with the steady recovery of the Japanese economy, those expectations are likely to push up the yen.
Some market participants are beginning to be concerned about the risks of an earlier rate hike.
The euro has upside risk should economic data such as German retail sales give the market a surprise.
We cannot expect a grand coalition to undertake bold and speedy reforms, especially of the labor market and tax system. The euro looks weak now.
We cannot expect a 'grand coalition' to undertake bold and speedy reforms, especially of the labor market and tax system. The euro looks weak now.