Interest rate differentials point to a higher EUR/USD – Nordea
|EUR/USD came briefly above 1.10 this week before falling to just below 1.09 today. Economists at Nordea note that the rate differentials continue to point toward a higher EUR/USD ahead.
EUR/USD to move about sideways in the near term
“Given that the ECB has had room for more positive rate surprises than the Fed, a higher EUR/USD is understandable.”
“The better outlook on the Euro Area’s energy balance also points toward a lower risk-premium on the Euro.”
“In the short-term, we see EUR/USD moving about sideways as markets reprice expectations on both the Fed and the ECB, however, it is clear that the rate differentials continue to point toward a higher EUR/USD ahead. China's reopening also points in that direction due to a better outlook for the global economy.”
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