- The positive reaction in EUR/USD after the ECB signalled openness to a 50bp rate hike in September (while formally announcing a 25bp one in July) was exceptionally short-lived.
- Probably, a key reason behind the reversal of the EUR/USD spike during President Lagarde’s press conference has been the underperformance of other assets the EUR tends to be linked to in the short term.
- Our view remains that in the current unstable environment for global sentiment and as the Fed pushes through with 50bp rate hikes during the summer, the dollar should remain supported.
For further details see:
ECB Hawkishness Not Enough To Lift The Euro Right Now