EUR/USD remains under pressure for the reasons we discussed above, notes Chris Turner, currency analyst at ING.
EUR/USD may break to the 1.0800 area
“The focus today will be the release of the ECB minutes from the September 11-12 meeting, when the ECB cut rates by 25bps but provided no forward guidance. Since then, we have seen a terrible set of PMI data September across the region and ECB speakers have acknowledged declining inflation risks and rising growth risks.”
“Therefore, the market is fully pricing in 25bp rate cuts in October and December and keeping those EUR:USD swap spreads wide. It seems unlikely that the release of today’s minutes could dampen expectations of a rate cut from the ECB next week – but let’s see.”
“EUR/USD remains weak. Technically it looks like it may break down to the 1.0800 area. But we are not sure if the US short-term yields are the trigger, as these have moved far and quickly. What would be a trigger are higher energy prices and that is why tension in the Middle East could demand a higher euro risk premium.”
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.
