EUR/USD: Scope for a more sustained break below 1.05 – MUFG
|EUR/USD remains roughly unchanged in the aftermath of the ECB policy announcement. Economists at MUFG Bank analyze the pair’s outlook.
EUR/USD moves will be driven by the emergence of weaker US economic data
A renewed energy spike due to the Israel-Hamas conflict broadening out to include Iran is a risk for Europe and for EUR more specifically. We currently assume that does not happen.
The primary determinant of EUR/USD moves we think will come from the US Dollar side and will be driven by the emergence of weaker US economic data.
EUR/USD remains resilient but we still see scope for a more sustained break below 1.0500 but maintain that levels below parity are unlikely.
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