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EUR/USD rebounds slightly but downside risks persist

BBH says EUR/USD support sits at 1.1200 and 1.1111, while swaps imply nearly 75 bps of ECB tightening to around 3.25% over the next 12 months.

Reported · Written up by our desk · Major Pairs

Brown Brothers Harriman’s Elias Haddad said EUR/USD has rebounded slightly after hitting fresh cyclical lows, with immediate support cited at 1.1200 and 1.1111, according to FXStreet.

FXStreet reports that mixed Eurozone CPI left inflation above target, which, in the BBH view, preserves the ECB’s scope for additional rate hikes.

BBH also pointed to the swaps curve implying nearly 75 bps of tightening to about 3.25% within the next 12 months, which would reduce policy divergence with the Fed.

Still, FXStreet said stronger US growth and France’s worsening budget situation keep EUR/USD risks skewed to the downside over the coming months.

Latest closeEUR/USD 1.133 ▼0.3%

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