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EUR/USD stays below 1.1200 ahead of ECB account

Brown Brothers Harriman said the ECB Account for the Sept. 9-10 meeting is expected to reinforce further hikes, even as EUR/USD downside risks remain.

Reported · Written up by our desk · Major Pairs

EUR/USD was described as trading weak below 1.1200 ahead of the release of the ECB Account for the Sept. 9-10 policy meeting, according to FXStreet citing Brown Brothers Harriman’s Elias Haddad.

Haddad pointed to above target Eurozone inflation and a firmer growth outlook as providing the ECB room for additional tightening, which he said could limit divergence with the Fed.

At the Sept. 9-10 meeting, the ECB unanimously raised the policy rate by 25 bps to 2.50%, and the Account is expected to support further hikes, even if the message may look somewhat dated after a recent rise in bond yields.

Still, BBH noted stronger US growth and France’s worsening budget crisis as keeping EUR/USD risks skewed to the downside over the coming months, and said swaps pricing implies nearly 75 bps of tightening to 3.25% over the next 12 months.

Latest closeEUR/USD 1.122 ▼0.3%

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