In advance of what could be a very aggressive Fed tightening cycle, analysts at ING remain bullish on the dollar. Regarding EUR/USD, the recent hawkish turn from the European Central Bank (ECB) suggests the pair will probably play out a broad 1.10-1.15 range this year.
March will be a pivotal month for financial markets
“10 March sees the ECB release new inflation forecasts and potentially opens the door for a 4Q rate hike. 16 March sees the Fed release new Dot Plots and possibly starts off the cycle with a 50bp hike. We currently look for five hikes in total from the Fed in 2022.”
“Expect realised volatility to continue to rise.”
“Our preference now is that EUR/USD traces out something like a 1.10/1.12 to 1.15 trading range as we brace for major central bank tightening.”
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
AUD/USD tests 0.6600 after hot China's inflation data
AUD/USD is testing 0.6600, sitting at a fresh two-and-half-week high touched in Asian trading on Friday, as traders cheer the hotter-than-expected Chinese inflation data. The RBA's hawkish tilt earlier and risk recovery underpin the Aussie ahead of a light US calendar.
EUR/USD: United States inflation and European growth coming next
The EUR/USD pair ended the last week as it started, trading a handful of pips above the 1.0900 mark. Panic dominated financial markets throughout the first half of the week as investors assessed United States macroeconomic data that spurred recession concerns.
Gold buyers continue to defend $2,400 ahead of US inflation data
Gold staged a decisive rebound following the bearish action seen in the first half of the last week. XAU/USD technical outlook suggests that the bullish bias remains intact. Investors await US inflation data while keeping an eye on geopolitics.
Arbitrum, Aptos, Starkware, SAND lead $220 million token unlocks next week
Token unlocks data on Friday reveals that the crypto market will see $220 million worth of tokens entering circulation next week amid signs of recovery from the recent market crash. This marks the second consecutive week of unlocks greater than $200 million.
Week ahead: US CPI to test market nerves, RBNZ might cut rates
The panic about the US economy being on the verge of a recession has mostly eased but markets remain jittery. Investors see a real risk that the Fed’s delay in cutting rates has made a downturn inevitable.