Home›Forex›Major Pairs›Euro edges higher as markets reprice ECB outlook

Euro edges higher as markets reprice ECB outlook

FXStreet says markets are pricing roughly 35 bps of ECB tightening by December, lifting EUR/USD fair value estimates to the mid to upper 1.14s.

Reported · Written up by our desk · Major Pairs

The euro is slightly higher versus the US dollar, supported by a shift in expectations for the ECB toward renewed hawkishness, according to a note from Scotiabank strategists Shaun Osborne and Eric Theoret cited by FXStreet.

The strategists point to recovering European yield spreads as markets reprice the ECB outlook, with EUR/USD gaining about 0.1% into the start of the North American session.

FXStreet adds that markets are now pricing around 35 bps of tightening by December, a larger move than the previous week, which the analysts say has raised their fair value estimates for EUR/USD toward the mid to upper 1.14s despite only modest recent gains.

They describe the near term setup as bearish to neutral, saying the euro’s recovery is notable but still lacks stronger momentum, with the RSI climbing back toward neutral but remaining below the 50 level in the mid 40s range.

Latest closeEUR/USD 1.143 ▼0.1%

More like this

Sources