The Euro has regained bullish momentum in recent weeks. The economists at MUFG Bank they expect that the rise in rates in the Eurozone, the reduction of the risk of recession and the reopening of China will provide more support to the common currency.
Downside risks for the Euro limited by the ECB monetary policy update
“The Euro should continue to trade at higher levels in the short termsupported by: 1) the expectations of further tightening of ECB monetary policy2) the lower risk of slowdown in the Eurozone economiesas natural gas prices continue to fall, and 3) the optimism about the reopening of China“.
“We see limited risk of the ECB surprising with dovish policy during the next week, which could trigger a major Euro sell-offgiven the recent bout of improvement in activity and core inflation data from the Eurozone.”
Source: Fx Street
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