As mentioned above, it is not yet entirely clear that this corrective phase in equity markets is over. If so, our view is that EUR/USD may reconnect with the sharp reduction in interest rate differentials between the Eurozone and the US and may start trading above 1.10, notes Chris Turner, FX Strategist at ING.
EUR/USD may start trading above 1.10
“Helping at some point should be near-term EUR rates, where the ECB’s currently forecast 81bps for this year looks too aggressive. Our view is currently for only 50bps of further easing this year. We favor EUR/USD to hold the 1.0900 support and if US Initial Jobless Claims surprise to the upside today, EUR/USD could again try to reach 1.10.”
“Elsewhere, EUR/CHF had a nice bounce yesterday as market interest rates rose across the globe. A less dovish ECB cycle repricing could further help EUR/CHF, although we doubt it can sustain gains above 0.9450/9500 in the current stressed geopolitical world.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
