Societe Generale Research flags a scope for EUR/USD and GBP/JPY to edge lower lower over the coming weeks.

"We don't think the market is short enough of euros to prevent yet another new, marginal low in this move and it's worth re-emphasising that thanks to the weakness of the yuan and sterling this summer, the trade-weighted euro is reached its best level of the year a week ago. Given recent economic data and likely ECB moves, it seems likely, in fact,that we will see EUR/USD edge lower in the weeks ahead, unless we get clear signals of further Fed easing or clear signals of European fiscal easing. And if we get the former, we w much rather be long the yen than the euro, thanks," SocGen notes. More Brexit noise is likely too as Europe ‘responds' to PM Johnson's demands. GBP/JPY looks more likely to fall to 125 than rise to 130," SocGen adds.