The EUR/USD rally came to a screeching halt after markets’ dovish interpretation of the ECB rate decision. Even so, the Société Générale economists point out that the long term points to the rise.
New profit taking is not ruled out
“Tactically, further profit taking cannot be ruled out.”
“The ECB may attempt to correct the market’s dovish interpretation of last week’s rate decision and statement. This could entice euro buying, but conviction is likely to remain low until the release CPI in the US next week.”
“The long-term trend for EUR/USD continues to lean higher on the back of improving terms of trade, buoyant economic growth in China, narrowing of the Fed-ECB policy spread, and attractive valuation. “
“Main downside risks are associated with Russia’s new military offensive in Ukraine and escalation with Western allies/energy disruption.”
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.
