The Euro (EUR) has recovered somewhat from the low reached after yesterday’s ECB rate cut. But EZ/U.S. spreads remain wide, with markets pricing in further ECB easing before the end of the year (the 2-year spread has fallen to –187 basis points, the widest since early July), says Shaun Osborne, Chief FX Strategist from Scotiabank.
EUR stabilizes after ECB rate cut
“ECB Governor Villeroy previously commented that the ECB should continue to ease policy ‘as appropriate’ but would maintain ‘full optionality’ in future meetings.”
“The spot market is consolidating the October decline that has largely fulfilled the bearish promise of the break below 1.10 (remember that the break below 1.10 support earlier in the month triggered the pattern double top at 1.12 which pointed to a fall towards the 1.08 area).”
“The EUR sell-off appears extended and could see a bit more near-term relief if the spot market can overcome minor trend resistance at 1.0850 in the next day or two. Firmer resistance lies at 1.0850 .0900/10. Support is at 1.0800.”
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.
