In the wake of the surprise ECB policy decision, EUR has remained under pressure on speculation of an even more aggressive Q4 monetary policy stance.
Adding fuel to such speculation, just yesterday the OECD stressed that further measures including quantitative easing were warranted given the weak growth and inflation outlook.
Looking ahead, the focus shifts to today’s ZEW surveys, which we expect to confirm further deteriorating sentiment. This is mainly due to weak growth momentum and intact geopolitical tensions.
All of the above stands in contrast to the US, where the latest data confirms improving growth prospects. Hence, from a broader angle there should be room of further widening ECB-Fed monetary policy expectations to the detriment of EUR/USD.
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