EUR/USD: Under pressure on Euro stress – Deutsche Bank
Deutsche Bank analysts describe EUR/USD weakness as European spreads widened and bank stocks sold off. The Euro fell sharply against the Dollar, while markets questioned whether the European Central Bank could deliver another rate hike this year.
Deutsche Bank analysts have expressed concern over the EUR/USD weakness, citing widened European spreads and a decline in bank stocks. The Euro experienced a sharp drop against the Dollar, prompting markets to question the European Central Bank's ability to deliver another rate hike this year. The financial stress has fueled doubts about the central banks' capacity to hike rates as aggressively as previously anticipated.
Tighter financial conditions are expected to aid in reducing inflation, but the selloff also raised questions about the economy's readiness to handle another rate increase. Consequently, the number of further rate hikes anticipated by the December meeting of the ECB decreased by 6.1 basis points to 23.5 basis points.
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