The beginning of 2022 has seen strong performance by those currencies backed by central banks willing to pull the trigger on rate hikes. In the opinion of the analysts of ING, the take off of The Fed should push EUR / USD briefly below 1.10 this summer, but by the end of the year the looming ECB rallies in 2023 could provide some support for the pair..
FX favors a strong dollar in the first half of 2022
“We expect the dollar to remain strong during the first half of the year as the Fed prepares to pull the trigger in the second quarter and the market begins to price the US rate close to 2%. Also, an environment Mixed global risk should prevent the kind of broad-based flows to emerging markets that can occasionally weaken the dollar. “”
“Our bet is that EUR / USD will briefly trade below 1.10 this summer, but it could find support by the end of the year, ahead of the 2023 ECB rate hike.”
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