ING economists now see downside risks to EUR/USD, which could extend to 1.02 on an acceleration of the bond sell-off.
1.05 may be the minimum under current conditions
We estimate that an extension of the rise in US Treasury yields to the 5.0% level would take EUR/USD to 1.02. This is not our base hypothesis, but it is clear that the pressure on the Euro is not limited to US rates.
The evolution of activity in the US remains much more important, and if signs of weakness emerge on the other side of the Atlantic (and markets foresee further tightening of the Fed), we expect a rapid change in trend in the EUR/ USD, but it may not be a short-term story. Holding the key support at 1.0500 will be a success for those hoping for a trend reversal soon.
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.
