The Euro (EUR) experienced significant volatility following the European Central Bank's announcement on Thursday. ING economists analyze the outlook for EUR/USD.
US NFP will determine direction of EUR/USD
The core of the ECB statement did not change. The new round of projections sounded quite encouraging from an easing point of view: inflation was revised slightly downwards and projected at 2.0% in 2025, while growth forecasts were also revised downwards. However, President Christine Lagarde reiterated that the ECB does not have enough confidence in disinflation and that it will receive more information in April and, above all, in June.
The EUR/USD pair is trading near the top of the range, which is consistent with such a wide short-term rate gap (-125 basis points in the two-year swap market). This means that it may be vulnerable to short-term corrections, but also that it is starting from a good level in case US rates enter a decisive decline.
Today, US Nonfarm Payrolls will determine the direction of EUR/USD – expect some resistance at the key 1.1000 level should the Dollar continue lower today.
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.
