Euro (EUR) was little modified, final at 1.1415 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong observe.
Room for Fed to renew easing cycle in the end
“Day by day momentum will not be displaying a transparent bias for now whereas RSI fell. Help at 1310 (21 DMA), 1.1235 (23.6% fibo retracement of 2025 low to excessive). Rapid resistance at 1.1420/30 ranges earlier than 1.15 ranges.”
“Final week ECB lowered price by 25bps, as extensively anticipated. However extra importantly, Lagarde commented that the ECB is attending to the top of a financial cycle ‘that was responding to compounded shocks, together with COVID, the illegitimate struggle in Ukraine and the power disaster’. She additionally stated that the ECB is now ‘in a superb place’ to take care of uncertainties forward, not least as a result of US commerce insurance policies.”
“Different ECB officers have additionally echoed related views. Vujcic stated that the ECB is almost executed whereas Stournaras stated that the bar for extra price cuts is excessive. Our home view appears to be like for 1 extra lower this yr, however that is already greater than priced in. ECB signalling an ‘finish is close to’ bolstered our earlier view that prospects of ECB lower cycle nearing its finish and room for Fed to renew easing cycle in the end ought to see yield differentials slim in favour of EUR.”
