Societe Generale Research discusses the fading Trump effect on EUR/USD prcing.

 

"Relative interest-rate differentials continue to move in the dollar's favour, while markets still price in three ECB rate hikes before the middle of next year. Is there really enough growth in the Eurozone to justify that? It feels like an overreaction to a temporary inflation shock, albeit one that may persist as long as the energy crisis continues. However, the growth outlook is also likely to deteriorate for as long as the energy crisis remains unresolved," SocGen notes.

 

"The chart shows EUR/USD alongside two-year interest rates, suggesting that while President Trump succeeded in weakening the dollar more than interest-rate differentials alone would have justified last year, the "Trump effect" is fading," SocGen adds.