- Analytics
- News and Tools
- Market News
- EUR: Negatives piling up for the Euro – ING
EUR: Negatives piling up for the Euro – ING
The 4Q24 drop in EUR/USD was primarily driven by the widening in the short-dated swap rate differential due to diverging policy expectations between the Federal Reserve and the European Central Bank, ING’s FX analyst Francesco Pesole notes.
EUR/USD set to rebound short-term
“Over the Christmas holiday period and in particular, in yesterday’s trading session, the EUR/USD decline accelerated in spite of a re-tightening in the EUR:USD two-year swap rate gap from 200bp (on 12 December) to the current 185bp. We estimate that EUR/USD is trading around 2.5% below its short-term fair value, therefore displaying a risk premium associated with growth concerns for the eurozone.”
“Aside from the implications of expected US protectionism under Trump, we think pressure is being added by the rise in TTF gas prices to 50 EUR/MWh caused by Ukraine’s pipeline shutdown. The pound was the worst performer yesterday, and it is probably not a coincidence that GBP is the most negatively correlated with gas in the G10.”
“If the technical picture is pointing to a EUR/USD short-term rebound, the euro remains a broadly unattractive currency in the longer run, and we cannot exclude another leg lower might be needed – perhaps to the 1.0200 mark – before a recovery.”
© 2000-2025. 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
