EUR/USD could drift lower over the short-term – MUFG

So far in August, EUR/USD has struggled to sustain levels over 1.1000. Economists at MUFG Bank analyze the pair’s outlook.

Possible quiet trading conditions over the coming few weeks

The resilience of US yields in the face of another positive CPI data print points to ongoing US Dollar support over the short-term. Yield should be a greater influence which points to a grind lower for EUR/USD. 

The risk of a spike in volatility, if it were to materialise, could be from China and any increased concerns over China's growth would likely weigh on EUR/USD as well. This view of some Dollar strength is a short-term view reflecting possible quiet trading conditions over the coming few weeks.