EUR/USD remains lower. The ING economists expect the world’s most popular currency pair to remain below par in the coming days.
Estimating the impact of energy limits
“The 2yr EUR-USD swap rate spread has again widened in favor of the dollar and while we have highlighted on multiple occasions how the rate spread is effectively playing a supporting role in EUR/USD dynamics of late, this has reduced the scope for a recovery of the euro later.”
“There is still some uncertainty over whether the government’s efforts to freeze energy bill hikes would have a predominantly pessimistic impact in central banks (since inflation would be lower) or an optimistic impactsince the economic impact would be less and that allows a greater hardening. As markets wait for more clarity on this, dollar resistance may keep EUR/USD at or below 1.0000 for days to come..”
Source: Fx Street
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