EUR/USD and USD/JPY: BNP Paribas says euro may climb above 1.13 and yen may fall below 100 in the short term

BNP Paribas feels that the USD remains vulnerable on the forex and may fall further.

"The USD remains vulnerable after the 21 September FOMC, with US real rates which have sharply declined. We believe that the Fed will raise rates in December, and, in the coming weeks, members of the Fed are expected  to signal that they are ready to raise interest rates before the end of the year if the data allows for it.

However, with the prospect of the Fed highly dependent on data and financial conditions, the markets should not increase rate hike expectations in December far beyond the 50-55% probability now reflected in the bond markets. Better US data could have more influence on this measure, but the numbers this week should not point in that direction.

We believe that the EUR/USD can climb above 1.13 in the short term and the USD/JPY can drop below 100.