For most of the past month, the euro had been trading lower against the dollar, bringing the pair closer to the bottom of the 1.0500-1.1000 range year to date. The economists of MUFG Bank are reporting that a move below 1.0500 could occur due to renewed fears about the Credit Suisse bankruptcy.
EUR/USD will be more volatile over the next month
“He pair risks breaking below 1.0500 in the short term if concerns about the health of Credit Suisse are not resolved quickly“.
“We had assumed that the ECB would follow the guidance of its last monetary policy meeting and apply another 50 basis point hike, but that is no longer a given. Growing concerns about the health of the banking sector could cause the ECB to more cautious about continuation of the large increases, however, the fundamental case for further increases remains, as core inflation surprised to the upside earlier in the year, the eurozone economy has avoided recession and the ECB has has lagged behind in the current tightening cycle, leaving more room for rates to continue rising.”
“We expect EUR/USD price developments to be more volatile over the next month.”
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.
