EUR/USD Fragile Amidst Strong US Data and Bleak Eurozone News
Aa
Share
EUR: Staying soft
EUR/USD remains fragile as US data stays strong and the news out of the eurozone and China remains bleak. We mentioned higher oil prices potentially weighing on the euro earlier this week and the focus today switches to natural gas, where it looks like LNG workers in Australia will go on strike after all. Higher natural gas prices will not be welcome news for Europe.
As for next week's European Central Bank meeting, the market now prices just 8p of rate hikes. And there is some focus too that the ECB might just lift the main refinancing rate (now 4.25%) while keeping the deposit rate unchanged at 3.75%. We doubt such a move would help the euro much.
Today should be a quiet session for EUR/USD. Yet there seems no reason for EUR/USD to bounce and pressure could build for sub 1.0700 levels if, for example, the international community drives USD/CNH to the 7.40 area.
Elsewhere, it looks like the Polish zloty will stay weak after a dovish press conference from the National Bank of Poland yesterday.
