EUR/USD Sees Choppy Trade Following Warsh's Speech

The Euro to Dollar (EUR/USD) exchange rate dropped to 1.1582 on Friday after Kevin Warsh's speech at Jackson Hole, triggering a strong daily advance in the US dollar.

Rabobank still expects choppy trade in EUR/USD with an upside bias likely lifting the currency pair to the 1.18 area into spring.

The bank attributes the recent decline to increased Fed hike bets following Warsh's speech, which pushed the market-implied probability of a September Fed hike from around 35% to 57.5%.

Rabobank notes that European developments will not be the primary driver of EUR/USD price action in the coming weeks, with news pertaining to the US dollar dominating instead.