- Analytics
- News and Tools
- Market News
- EUR/USD to lose more ground as market is excessively priced for ECB rate hikes – MUFG
EUR/USD to lose more ground as market is excessively priced for ECB rate hikes – MUFG
EUR/USD has visited 2021 lows around 1.1430. The policy divergence between the Federal Reserve and the European Central Bank (ECB) continues to drive the pair's action. Economists at MUFG Bank expect not to get any let-up on policy stimulus from the ECB, subsequently, EUR/USD should see another leg lower.
The market remains excessively priced for rate hikes in the eurozone
“The market remains excessively priced for rate hikes in the eurozone. While other markets may also be overpriced now (but have corrected somewhat) it is only the ECB that remains so adamant in its dovish guidance, guidance which is likely to be repeated strongly at the next meeting.”
“Over the coming months, the scope for further declines in EUR/USD could come from changes in tightening over a longer period. Currently, there is only a 10bp spread between 2yr and 3yr US OIS (135bps vs 145bps) but if the US labour market starts to recover strongly in the coming months, the markets view of rate hikes further out could change more relative to the eurozone – that could be the catalyst for another move lower in EUR/USD.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
