Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
Sep 19 - 06:55 PM

ING: EUR/USD Outlook Post-FOMC Rate Cut

By eFXdata  —  Sep 19 - 03:00 PM

Synopsis:

ING anticipates EUR/USD will trend towards 1.12 and potentially 1.13 following the Fed's recent 50bps rate cut.

Key Points:

  1. Short-Term Confidence:

    • ING maintains a confident outlook for EUR/USD to reach 1.12 in the short term, expecting consolidation above 1.11 after post-FOMC volatility subsides.
  2. Impact of Fed's Cut:

    • The Fed's larger-than-expected rate cut reinforces the bullish sentiment for EUR/USD, providing upside potential for the pair.
  3. ECB's Stance:

    • An increasingly hawkish tone from the ECB is contributing to market stability, preventing expectations of another cut in the eurozone by October.
  4. Swap Spread Dynamics:

    • The EUR
       
      2-year swap spread has narrowed to -0.85bp, down from -160bp in April and -100bp a month ago, indicating improving rate differentials favoring the euro.
  5. Growth Concerns:

    • Despite these factors, the soft growth outlook in the eurozone is a limiting factor, suggesting that without this concern, EUR/USD could be trading closer to 1.13.

Conclusion:

ING's outlook suggests a positive trajectory for EUR/USD in the wake of the Fed's cut, supported by a strong ECB stance, though eurozone growth concerns may cap its potential.

Source:
ING Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2024 eFXdata · All Rights Reserved
!