Euro: Gentle upside against US Dollar as greenback softens - ING
ING’s Chris Turner says EUR/USD remains well supported by broad Dollar softness. Expected mild eurozone growth in the August PMIs and elevated inflation expectations keep the case for another European Central Bank (ECB) hike alive.
ING's Chris Turner notes that the EUR/USD exchange rate remains well supported by a softening US dollar. Despite mild eurozone growth expectations from August PMIs and high inflation expectations, the European Central Bank (ECB) may still raise rates. EUR/USD is expected to trade in the 1.1670-1.1710 range before potentially edging higher.
However, high natural gas prices pose a risk. The article suggests that a benign dollar decline benefits all markets. The upcoming fiscal consolidation meeting in Washington could be dollar-negative, but it is unlikely. This week's eurozone data includes August PMIs, which are expected to show continued mild expansion and support another ECB hike in September.
The ECB's Consumer Expectations Survey shows three-year inflation expectations at 3.0% in March and are expected to stay elevated at 2.8%. EUR/USD is likely to consolidate in the tight 1.1670-1.1710 range today before potentially gaining.
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