EUR/USD should be doing better now that US short-term rates are on the move again, he notes Chris Turnerstrategist of ING FX.
The Euro will trade around 1.0800 in the short term
“The problem is that EUR short-term interest rates are also quite low as the market is pricing in the European Central Bank cutting more than twice this year. That valuation seems too aggressive to us and instead we think EUR two-year swap spreads will narrow further and provide some support to EUR/USD.
“However, the European manufacturing sector remains in a state of general malaise – and a weaker Chinese manufacturing PMI overnight does not help. This means that the Euro is not seen as the preferred vehicle to express a bearish view on the Dollar. Therefore, it looks like EUR/USD may remain supported in a range of 1.0790-1.0850 for the time being, with its best hope being much weaker than expected US data.”
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.
