On Tuesday (Oct 25), / rose, temporarily trading at 0.9889, up 0.15%.
Another 75 basis point hike is likely at Thursday’s meeting, but the euro‘s gains will be limited.
Analysts at MonexEurope said this was because the market had already priced in a 75 basis point hike and Europe had no incentive to change its expectations for a 50 basis point hike at the December meeting.
It is also likely to reaffirm its commitment to fighting inflation at its November 1-2 meeting.
The energy crisis is expected to keep the euro zone’s economic outlook bleak for the next few quarters, and the region’s fiscal health will be even more critical for traders.
The euro was trading 30 points higher at 0.9834.
Daily moves between higher and lower euro/dollar are often seen as a sign of increasing buying interest.
Still, the pair remains below the long-term downtrend line from the high of 1.1494 posted in mid-February this year and currently sits around 0.9940.
