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Eurozone data strengthen case for ECB rate hikes in September

BBH said EUR upside may be capped because tighter policy is already priced and the pair faces nearby technical resistance.

Reported · Written up by our desk · Central Banks

Brown Brothers Harriman’s Elias Haddad said improving Eurozone leading indicators, including Germany’s IFO, PMI, and ZEW, point to a recovery in economic activity. In Germany, the IFO business climate index rose to 86.6 in July from 85.7 in June, driven entirely by expectations, Haddad said.

FXStreet reported that Haddad’s view is that inflation remains above target, which supports the case for the European Central Bank to resume raising rates in September. The analysis also argued that markets may already have priced in some tightening.

However, Haddad said the scope for further Euro gains could be limited by already-priced policy moves and by nearby technical resistance.

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