ECB to hold until Q3 2019; EUR/USD needs 1.15 area to steady - Scotiabank
|Analysts at Scotiabank explained that ECB rate tightening is not expected until Q3 2019.
Key Quotes:
"Germany reported as expected Jul PPI (+0.2% M/M, +3.0% Y/ Y) while Eurozone construction output rose 2.6% in the Jun year. Bloomberg’s survey of forecasts reflected a slight deceleration in growth expectations (2.1% this year, down from 2.2% in the previous survey) while an ECB rate tightening is not expected until Q3 2019. Eurozone-US rate spreads have flattened out over the past couple of months around -325bps but the yield gap remains a significant hurdle for the EUR absent a more obvious (USD-negative) reasons USD long positions to bail out."
"The market really needs to get back to the 1.15 area to steady and push on through the upper 1.15s/low 1.16s (40-day MA at 1.1610) to strengthen. Support is 1.1375/00."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.