ECB hawkishness may be insufficient to support EUR in a stagflationary environment – Morgan Stanley

Anil Panchal FXStreet

Late on Wednesday, Morgan Stanley (MS) conveyed its bearish bias on the EUR/USD pair, targeting the 0.9300 level. The US bank highlights stagflation and geopolitical concerns as the key catalysts favoring their view.

Key quotes

Market implied terminal rates for the ECB may be elevated (3%) compared to a more plausible outcome like 2%.

The upcoming inflation print will be an important market event as investors seek to gauge the path for Eurozone inflation.

EUR/USD fades bounce off yearly low

The bank report joins hands with the market’s latest cautious move to trim the EUR/USD pair’s biggest daily gains in six months.

Also read: EUR/USD struggles to extend rebound beyond 0.9700, German Inflation, US GDP eyed

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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