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Euro vulnerable to further downside against dollar, HSBC warns

HSBC points to fragile euro yield support, plus eurozone growth worries and higher energy costs that could weigh on the single currency.

Reported · Written up by our desk · Major Pairs

HSBC strategists told FXStreet that EUR/USD faces downside risk as the European Central Bank keeps a cautious, data dependent approach and does not signal further rate hikes.

They said support for the euro from higher yields is fragile, while weak eurozone growth, rising energy costs, and worsening terms of trade could increasingly pressure EUR against the US dollar.

The FXStreet commentary also noted that EUR/USD was holding sizeable gains near 1.1400 in the European session, with the move linked to a broadly weaker US dollar.

Separate FXStreet market notes cited GBP/USD holding near 1.3350 amid a weaker US dollar backdrop and expectations for later week Fed and BoE policy announcements.

Latest closeEUR/USD 1.137 ▼0.3%|GBP/USD 1.332 ▼0.4%

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