Apart from the brief rebound induced by the speculation about the dismissal of Powell yesterday, the EUR/USD looks quite comfortable quoting on the bass 1.16. This is despite the fact that the short-term SWAP rates of the USD are negotiating about 4-5pb below yesterday’s peak, since the risks that the new Fed president is an ultra-moderate have increased, says the FX analyst of Ing Francesco Pesole.
The risks are balanced for the EUR/USD
“Anything related to the EU seems to be in the background with respect to the EUR/USD. Yesterday we discuss how the French political noise can return in autumn and generate some spill in the FX, but for now it is not showing any tangible impact on the FX. At the broader level of the EU, the European Commission has proposed an increase of 2 billion € in the EU budget, which has already been rejected by Germany.”
“There is a long period of negotiations ahead, since Ursula von der Leyen seeks to gather a unanimous consensus on the increase in the budget by 2027. We will hear a lot about this on the road, and the implications for the long -term value of the euro are not despicable. The dying productivity of the euro zone in relation to the US has contributed to maintaining the fair value of the EUR/USD in the last term limited in the last decade.”
“Returning to the short term, we think that the risks are balanced for the EUR/USD and depend largely on US data in the coming weeks, we believe that a 1.150 movement seems more likely that at 1,170.”
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.
