The ECB meeting this week is said to be helping underpin the Euro on dips but with the market widely expecting a 25bp hike, it may take further hawkishness from Trichet to add to the Euro gains.
Currently EUR/USD is stalling around the 1.33 mark as the lower levels only serve to give bulls better levels to buy. Dealers talk of a raft of topside targets from 1.3450 back to the historic 1.3666 high but for such levels to look viable it has been suggested that another fundamental knock to the Dollar will need to be seen.
The IFR are of the belief that the outlook for US rates will also need to be deciphered before a return to the historical highs can be sustained. Looking ahead, the 10:00 GMT release of Euro Zone PPI is seen as the immanent event-risk. Economists expect the October release to come in at +0.2% M/M &
+4.1% Y/Y.
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