EUR/USD should be doing better now that short-dated US rates are on the move again, ING’s FX strategist Chris Turner notes.
EUR to trade near 1.0800 in short term
“The problem is that short-dated EUR interest rates are quite soft too as the market considers the European Central Bank cutting more than twice later this year. That pricing seems far too aggressive in our view and instead, we think two-year EUR swap differentials will narrow further and provide EUR/USD with a little support.
“However, the European manufacturing sector remains in a general malaise – and a softer Chinese manufacturing PMI overnight doesn't help. This means that the euro is not seen as the preferred vehicle to express a bearish dollar view. It therefore looks like EUR/USD can stay supported in a 1.0790-1.0850 range for the time being, and its best hope will be some much softer than expected US data.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD resumes slide and nears intraday lows
The US Dollar resumed its advance after discouraging US data and as Wall Street turned south. EUR/USD accelerates below 1.0800 as recession signs outpace hopes for upcoming rate cuts.
GBP/USD accelerates its decline and flirts with 1.2750
The prevailing risk-off tone in the broader FX world weighs on the British pound and its peers, sending GBP/USD back to the area of four-week lows near 1.2750.
Gold consolidates gains around $2,450
After falling to $2,430 earlier in the day, Gold regains its traction and trades at around $2,450 in the American session. The benchmark 10-year US Treasury bond yield is down more than 1% on the day below 4% after weak US data, allowing XAU/USD to hold its ground.
Crypto Today: Bitcoin holders accumulate without fear, Ethereum struggles while XRP holds gains steady
Bitcoin long-term holders have continued to accumulate BTC consistently in the last two months. Ethereum hovers around $3,100, struggles to make a comeback to resistance at $3,500.
Bank of England cuts rates and there are more to come this year
The Bank of England is staying tight-lipped on when it expects to cut rates again. But we think better news on services inflation and wage growth can unlock one, or more likely two rate cuts by year-end.