EUR/USD reached a new cycle high around 1.25

KBC Market Research Desk KBC Bank

EUR/USD

EUR/USD reached a new cycle high around 1.25. Dollar weakness persists despite the rising interest rate differential in favour of USD. Trump’s protectionist rhetoric weighted on the greenback.

EUR/GBP

EUR/GBP stays in a sideways range, roughly between 0.8700 and 0.9050. A break of the downside didn’t occur despite hawkish BoE-rhetoric as the difficult Brexit-process remains a drag on sterling.

USD/JPY

USD/JPY is the exponent of dollar weakness. The pair tests key support around 106.50. Investors seem to challenge Japanese officials as they say that current levels of the yen don’t warrant FX interventions.

EUR/CZK

EUR/CZK: the CNB hiked its policy rate from 0.5% to 0.75%. We expect two additional tightening moves during the year and a strengthening of the koruna towards EUR/CZK 25. Governor Rusnok sounded slightly dovish though after the policy meeting.

EUR/PLN

The Polish zloty lost some ground this month because of the uptick in market volatility and as the NBP downplayed normalisation expectations. Governor Glapinski delayed the expected timing of a first hike from the end of this year to next year.

EUR/HUF

EUR/HUF: The forint trades stable between 305 and 315 already for a remarkable amount of time. The MNB continues pursuing an extremely easy policy despite strong underlying growth and inflation momentum.

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KBC Market Research Desk

KBC Bank

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