Euro: Downside risks against US Dollar towards 1.1400 support – BBH
Brown Brothers Harriman’s (BBH) Elias Haddad expects the European Central Bank's (ECB) April Account to underline a tightening bias, with markets already pricing high odds of a June rate hike to 2.25%. Haddad argues that rate hikes in a weak growth, high inflation backdrop are not bullish for the Euro (EUR) and sees EUR/USD drifting lower towards 1.1400 as US growth outperforms.
ECB tightening backdrop weighs on Euro
"The ECB’s Account of the April 30 rate decision (Thursday) will provide more insights into policymakers’ tightening bias."
"At that meeting, the ECB kept interest rates on hold at 2.00% for an 8th consecutive meeting."
"Markets continue to imply 86% odds of a 25bps ECB rate hike to 2.25% at the next June 11 meeting."
"Rate hikes in a low growth, high inflation environment, is not bullish for EUR but should help cushion the downside."
"We see room for EUR/USD to edge lower towards support at 1.1400, reflecting a stronger US growth outlook relative to the Eurozone."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
Mitrade makes no representation or warranty as to the accuracy or completeness of the information provided and accepts no liability for any loss arising from reliance on such information.
Recommended Articles
