The chances of a European Central Bank rate cut will grow if EUR/USD ascends through 1.15 this summer.
A source familiar with the ECB's policy discussions told Reuters that countering euro strength would be the main reason for a rate cut. "I'll give you five reasons for a rate cut," the source said. "Exchange rate, exchange rate, exchange rate, exchange rate, exchange rate." The source said EUR/USD at 1.15 might be tolerable, but 1.20 could be critical nL4N23G0A0.
EUR/USD was last at 1.15 on Jan.
31 and last at 1.20 in May 2018.
EUR/USD rose to an 11-week peak of 1.1348 (EBS) on Friday, after disappointing U.S. employment data increased the probability of a Fed rate cut on July 31.
On Sunday, Banca d'Italia Governor Ignazio Visco blamed the EUR/USD rise on "interactions with U.S. interest rates etc" nF9N1XV01E.
The next ECB monetary policy meeting is on July 25, by which time Mario Draghi's successor as ECB president may have been named -- a decision that could affect the euro.
EURUSD: Click here