EUR/USD: Measured ECB tightening to support Euro – TD Securities
TD Securities' Macro Research team expects the European Central Bank (ECB) to continue a measured tightening cycle, delivering a final 25bp hike in December and taking the deposit rate to 2.75%, which they see as mildly restrictive.
The European Central Bank (ECB) is expected to continue a measured tightening cycle, with a final 25 basis point rate hike in December pushing the deposit rate to 2.75%, according to TD Securities. Analysts believe that current market pricing overstates future tightening and that policymakers may soon adjust expectations. They maintain a bullish outlook for EUR/USD throughout the year, noting that resilient growth and persistent inflation pressures keep the focus on returning rates to a mildly restrictive level. The odds of a full ECB tightening are not anticipated by either the bank or the broader consensus.
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