Yesterday, the dollar weakened slightly. However, the MUFG Bank economists expect the EUR/USD rally to fade as the pair approaches the 1.10 zone.
It is difficult to foresee that the current divergence in political expectations will continue
“It is difficult to expect the current divergence in policy expectations to continue if US data remains resilient.”
“The OIS market is currently targeting 50 basis points of ECB hikes between now and September, while the market is 80% betting on a 25 basis point rate cut by the Fed by then. No further turbulence in the banking sector, the flow of data will dictate the sustainability of that degree of divergence in policy expectations and, based on consumer confidence data, there is a greater risk that that divergence will narrow, which could cause the EUR/USD to lose steam again as we approach the 1.1000 level.”
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.
