Created
: 2024.10.01
2024.10.01 18:07
The two-year EUR:USD swap rate continued to widen in favour of the dollar yesterday, and is now around -110bp, some 25bp below the -85bp mid-September levels, ING's FX strategist Francesco Pesole notes.
EUR can fall below 1.110 in the coming days
"The notion that an inflation-concerned ECB would move more carefully than the Fed on easing is crumbling, as Powell continued to signal no interest to cut by 50bp again and inflation figures in Germany, France, Spain and Italy are all endorsing the ECB doves' case for a cut in October. Even ECB President Christine Lagarde struck a more dovish tone yesterday as she pointed to greater confidence in disinflation, which will taken 'into account in our next monetary policy meeting in October'."
"The large moves in the EUR:USD short-term rate differentials are pointing to a weaker EUR/USD now. Incidentally, we could see some fresh political risk premium being built into the euro as new French Prime Minister Michel Barnier is facing an even worse than expected deficit situation, and a likely political battle ahead to push forward any budget consolidation measures."
"Our rates team does not expect any respite in French bond spreads. Barnier delivers a key Parliamentary speech at 3PM CET today: expect some debt market volatility spilling into the euro. All in all, barring surprise in EZ and US data, we think EUR/USD can trade back below 1.110 in the next couple of days, and test 1.100 if US unemployment doesn't tick higher on Friday."
Created
: 2024.10.01
Last updated
: 2024.10.01
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy