The EUR/USD weakens below 1.09. ING economists believe that the most popular currency pair in the world could extend its decline towards the 1.0820/00 area if US 10y Treasury yields rise after US CPI data.
The focus is on the new sanctions
“Barring a surprisingly aggressive ECB meeting on Thursday, EUR/USD should stay weak. Indeed, some argue that with 65 basis points in ECB rate hikes now priced in by the end of the year, it’s actually hard for the ECB to deliver an aggressive surprise.”
“Europe has not yet imposed an embargo on Russian oil, but it is clear that this is the risk in the coming months. This action may cost eurozone growth between 1% and 3% and add a new layer of bearishness to the euro.”
“For today, watch out for another dip in German ZEW investor expectationsperhaps matching the extreme pessimism seen in March 2020. EUR/USD could drop to the 1.0800/1.0820 area today if US CPI sees 10y US Treasury yields move higher and German ZEW data It’s as bad as expected.”
Source: Fx Street
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