Euro: Narrow path for sustained strength against US Dollar – ING
The post Euro: Narrow path for sustained strength against US Dollar – ING appeared on BitcoinEthereumNews.com. ING’s Francesco Pesole writes that Middle East tensions have modestly re-tightened EUR/USD short-term swap rate differentials by around 10bp, though the spread remains wider than pre-war levels. While this supports expectations for a potential September European Central Bank (ECB) hike, Pesole argues the path for a stronger EUR/USD is limited and warns of downside risks, including a possible retest of 1.140. Rate spreads support but risks linger “We expect stabilisation today – with markets potentially wanting to wait for weekend clarity – but risks are of a retest of 1.140.” “While all this is injecting new confidence into previously dwindling expectations for a September ECB hike, the path for EUR/USD to come out stronger from this re-escalation is quite narrow.” “The Middle East military re-escalation has prompted a moderate re-tightening in EUR/USD short-term swap rate dif