EUR/USD: Selling pressure on the Euro should continue in the near-term – CIBC
|The ECB’s shift to a ‘meeting by meeting’ approach portends EUR headwinds in the short-term, economists at CIBC Capital Markets report.
The ECB switches up its approach
The main takeaway from last week’s ECB decision? That the shift to a ‘meeting by meeting’ approach on decision-making is now underway.
Over the coming months, we expect to see more progress made on the inflation front. Not least as the recent ECB Bank Lending Survey made it clear that demand for loans from the private sector is declining. That should buttress the case that the ECB is close to the end of its cycle. Taken in conjunction with an underpriced Fed, we expect that selling pressure on the EUR should continue in the near-term – as net long positions continue to come under pressure.
Over the medium-term, dips in EUR/USD should be bought as the hyper aggressive Fed QT program comes under greater scrutiny on the USD leg.
EUR/USD – Q3 2023: 1.08 | Q4 2023: 1.11
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.