EUR/USD will strengthen in the medium term due to the tightening of the ECB – Wells Fargo

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The EUR/USD pair maintains its recovery momentum. The Wells Fargo economists expect the common currency to gain ground against the dollar amid further tightening by the European Central Bank.

The ECB Deposit Rate will reach a maximum of 3.50% in June of this year

“We expect a new rate hike of 25 basis points in May, followed by a final rate hike of 25 points in June, with which the ECB Deposit Rate for the current cycle would reach a maximum of 3.50%. In this context , market prices, which currently imply a maximum monetary policy rate of around 3.09%, seem light to us.”

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“Our more forceful outlook for ECB policy is an important factor supporting our outlook for euro strength against the dollar over the medium term.”

Source: Fx Street

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