EUR/USD gained 0.2% to 1.1072, shrugging off a victory for the far-right Alternative for Germany (AfD) in the eastern state of Thuringia, but has now returned below 1.1048 to 1.1035, notes Philip Wee, Senior FX Strategist at DBS.
The ECB will join the Fed in lowering rates.
“The Euro had weakened in the last three days of the previous week, falling to 1.1048 from 1.1184, amid expectations of a second interest rate cut at the European Central Bank meeting on September 12.”
“Following eurozone CPI inflation fell to 2.2% year-on-year in August from 2.6% in July, the OIS market has priced in a 94% probability of a 25 basis point cut in the deposit facility rate to 3.50%.”
“Last week, ECB Chief Economist Philip Lane warned that the mission to return to the 2% target is ‘not yet assured’, pointing to concerns with the market pricing in a neutral rate of 2.00-2.50% by mid-2025.”
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.
