In the opinion of economists INGEUR/USD’s sensitivity to the movement of the Dollar and, by extension, to US activity data should be even higher at this time.
Boosted further by the Dollar after the moderate rise of the ECB
We believe that at this time the EUR/USD will once again be even more driven by the Dollar. Markets have come to terms with the notion that the ECB has probably peaked, meaning data releases in the Eurozone should lose some degree of relevance in the market.
Lagarde is likely to have moved from a short-term hawkish speech to advocating an approach of keeping rates high in the long term to combat inflation: some rejection of rate cut speculation can be expected if the data from the Eurozone deteriorate further.
The pair EUR/USD could rise again today, but a return to the 1.0600/1.0650 area around the Fed meeting seems appropriate.
Source: Fx Street
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