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EUR/USD Forecast: Euro Braces for Fed Tightening Next Week

EUR/USD Forecast: Euro Braces for Fed Tightening Next Week

EUR/USD ANALYSIS

EURO FUNDAMENTAL FORECAST: BEARISH

The Euro zone is under pressure from rising inflation due to commodity supply constraints (of which monetary policy cannot rectify) as well as its reliance on Russia/Ukraine. This has only exacerbated the divergence between the Fed and ECB respectively. Looking ahead to next week, the Fed’s interest rate decision dominates the calendar (see below) and is likely to incorporate a 25bps hike – almost fully priced in by money markets. Strong labour and inflation data (40-year highs reached yesterday) should keep the 25bps outlook intact. Fed Chair Jerome Powell also stated last week that there is a possibility of one or two rate hikes greater than 25bps which shows the aggressive intent by the Fed to tackle inflation. Another bout of hawkish comments during the press conference could lead to additional downside on EUR/USD . FED RATE PROBABILITIES

Source: RefinitivParticular attention will be […]

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  • EUR/USD Forecast: Euro Braces for Fed Tightening Next Week
  • EUR/USD Forecast: Euro Braces for Fed Tightening Next Week
  • EUR/USD Forecast: Euro Braces for Fed Tightening Next Week
  • EUR/USD Forecast: Euro Braces for Fed Tightening Next Week
  • EUR/USD Forecast: Euro Braces for Fed Tightening Next Week
  • EUR/USD Forecast: Euro Braces for Fed Tightening Next Week
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