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:
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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.
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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.
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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.
-
Swap Spread Dynamics:
- The EUR
- The EUR
-
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