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Hawkish ECB rate expectations support EUR/USD near 1.1680-1.1700
EUR/USD was flat in North American trade after a one-week high, as markets fully price a 25 bp ECB hike this Thursday and another in December.
Scotiabank strategists Shaun Osborne and Eric Theoret said EUR/USD was largely unchanged in North American trading after an overnight move to a fresh one-week high. They pegged the euro’s support to firmer European Central Bank rate expectations, alongside higher oil prices.
The strategists noted that markets are fully pricing a 25 basis point ECB hike scheduled for Thursday, followed by another 25 bps in December. They expect a hawkish tilt at the meeting, with ECB President Christine Lagarde set to present updated forecasts and highlight ongoing concern about upside risks.
On levels, Scotiabank pointed to limited resistance ahead, while the pair is expected to face resistance in the 1.1680 to 1.1700 area. Support is seen below 1.1580.
Scotiabank also said data ahead of next week was limited, citing second-tier French industrial production that delivered an unexpected contraction in July, and no major top-tier releases scheduled before ZEW sentiment figures. They characterized the recent EUR recovery as tentative, with the 200-day moving average at 1.1634 having provided modest closing resistance recently.
Latest closeEUR/USD 1.163 ▲0.0%