EUR up marginally as ECB inflation expectations climb – Scotiabank
|Euro (EUR) is entering Wednesday’s NA session with a marginal 0.1% gain vs. the US Dollar (USD), a mid-performer among the G10 in generally quiet trade, Scotiabank's Chief FX Strategist Shaun Osborne notes, Scotiabank's Chief FX Strategist Shaun Osborne notes.
Complicating current bias to cuts
"The currency remains range bound and releases have been limited to the ECB’s inflation expectations data. The 1Y inflation expectations measure climbed for a second month, to 3.1%, reaching its highest level since February 2024."
" This presents a complicating development for the ECB as policymakers seek to determine the outlook for rates, in the context of their current dovishness and bias to further near-term cuts."
"Chief Economist Lane has spoken to the ECB’s key rate not being cut below 1.5%, roughly 100bpts below its current level. Markets are currently pricing nearly one full 25bpt cut for the June meeting and 67bpts of easing by December."
"The trend from February is bullish, despite the flat range that looks to have developed between the April high (1.1573) and the local May 12 low (1.1065). Momentum indicators remain bullish and we look to near-term support around 1.1280 and resistance above 1.1400."
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.