Despite pressure on the U.S. dollar last week, the EURUSD failed to bounce back with the release of disappointing consumer confidence figures in the United States on Friday.It was expected that the greenback slip further before the weekend when a confidence index from the University of Michigan hit below expectations. However, this statistic is indeed revised down to 81.2 (preliminary figure) in June against 81.9 in May. The consensus forecast was set at 83.0.

The failure of the euro to rebound against the U.S. dollar while the latter sold off against all other major currencies (except the Swiss franc) illustrates how the single currency is a victim of the recent easing of monetary policy the European Central Bank (ECB).

Expectations from the ECB seem high but for the EURUSD uncertainty comes mainly from the United States, where the prospects of a new monetary cycle are much less clear. The Monetary Policy Committee (FOMC) of the Federal Reserve meets on Tuesday and Wednesday to establish its strategy on interest rates in June. No change in rates is expected, but Fed officials should agree on a further reduction of assets ($ 45 billion per month to $ 35 billion) share buyback program.

As the Fed is reluctant to give clear indications of a future increase in interest rates in 2015 (this remains a hypothesis of course), it will be difficult to see the U.S. dollar start the same type of rally like the one we observed in the GBP rate, following the Governor of the Bank of England, Mark Carney last weeks comments. Quite simply, the outlook for the U.S. dollar is towards gravitating higher, but markets always prefer to sell the dollar against the stronger currencies (sterling and the New Zealand dollar) while the Fed adopts no aggressive speech, unlike their British and New Zealand counterparts.