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ECB INTEREST RATE OUTLOOK LIKELY TO LIMIT EURO UPSIDE

EURO technical analysis

somrat4030

Well-known member
Staff member

US inflation latest updates, by forex forum.​


Investors want to sell the US dollar, though they are very cautious about going short. This sentiment is seen through a market response to the US inflation data for March. Later on, EUR/USD climbed above 1.09 in anticipation of the EB policy meeting. In the first case, even a downtick in the core CPI was enough for a decline in yields of US Treasuries and the US dollar index. In the second case, the victory of the bulls was short-lived.

The Euro suffered punishing losses in the first quarter of 2022. The currency is on pace to shed almost 3 percent against an average of its major counterparts, marking the worst three-month performance in 7 years. Taken together with losses in the second half of last year, the Euro is poised to give up nearly 4.5 percent over the course of nine months.

Losses are unsurprisingly concentrated in March of this year, registered against the backdrop of Russia’s invasion of Ukraine in the closing days of February. The crisis has placed a shooting war directly in the Eurozone’s backyard, disrupting trade flows and triggering a flood of Westward-bound refugees.

Moreover, ECB INTEREST RATE OUTLOOK LIKELY TO LIMIT EURO UPSIDE
The Euro may struggle to sustain any such gains however, held back by an ECB that is not expected to follow its global peers down the road of brisk interest rate hikes aimed at soaring inflation. Market pricing envisions target interest rates near 2 percent in the US, Canada and New Zealand by year-end. Australia and the UK are priced near 1.5 percent.

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