On Wednesday (Oct 26), / rose sharply, temporarily trading at 0.9974, up 0.05%.
Lale Akoner, senior market strategist at BNY Mellon Investment Management, expects continued tightening, with another 75 basis point rate hike this week, which will take deposits to 1.5 percent.
By raising rates early at this week’s meeting and again in December, the ECB has left the door open for a pause early next year, when we will be able to see more clearly the long-term impact of the Russian oil and gas supply crisis on Europe.
If poorly enforced retail energy price caps increase demand for electricity and chaotic fiscal interventions fail to shore up investor confidence in the eurozone periphery, Europe could be in for a bad winter.
Eur/USD is heading towards parity as the likelihood of more aggressive ECB rate hikes increases.
The risk picture triggered a fresh round of broad dollar selling.
All eyes are on sentiment in the face of calm data.
