EUR/USD stays underneath stress for the explanations we focus on above, ING’s FX analyst Chris Turner notes.
EUR/USD can break all the way down to the 1.0800 space
“In focus immediately would be the launch of the ECB minutes from the 11-12 September assembly when the ECB minimize charges by 25bp however supplied no ahead steerage. Since then, we have seen a horrible set of September PMI knowledge throughout the area and ECB audio system have acknowledged dwindling inflation dangers and growing development dangers.”
“Therefore the market is now absolutely pricing 25bp charge cuts in October and December and protecting these EUR:USD swap differentials vast. It appears unlikely that immediately’s launch of the minutes can reduce expectations for an ECB charge minimize subsequent week – however let’s examine.”
“EUR/USD stays soggy. Technically it appears like it may break all the way down to the 1.0800 space. However we’re undecided US short-dated yields would be the set off since these have come a great distance fairly rapidly. What could be a set off is greater power costs and that is why rigidity within the Center East might demand a higher threat premium of the euro.”