Euro: Headwinds from Fed and energy – ING
ING’s Chris Turner highlights growing headwinds for the Euro as higher energy prices and a more hawkish Federal Reserve push EUR/USD lower.
ING analyst Chris Turner outlines mounting challenges for the Euro, citing higher energy costs and a more aggressive Federal Reserve as key factors driving EUR/USD lower. He predicts a potential slide to the 1.15 level by month-end, highlighting the likelihood of ECB tightening expectations remaining overstated. Turner points to EUR/CHF and USD/CHF movements, attributing them to oil prices and Federal Reserve policy.
Higher energy prices continue to pressure ECB tightening expectations, with a 80 basis point increase anticipated by summer. The market may hold off on trading the other side of such a trade until more clarity emerges regarding Middle East events. EUR/CHF trades above 0.94, benefiting from higher oil prices and Switzerland's more stable rates.
Meanwhile, GBP/USD struggles, falling toward four-week lows due to a strong dollar and geopolitical concerns. Gold rebounds sharply after a volatile day, as a stronger Japanese Yen triggers broader USD selling pressure. Oil prices surge, with West Texas Intermediate (WTI) reaching a fresh high since July, signaling strong demand and tightening supplies.
Cryptocurrency markets remain cautious, with Bitcoin and Ripple trending lower. Diesel prices show a significant gap, with a US diesel crack spread exceeding $100 per barrel for the first time in over a year.
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