After two months of lethargy, EUR/USD began to move again. The last downward momentum coincided with the correction of relative interest rates for 2019. between the ECB and the Fed.
From here to where? Two interest rate increases from the ECB in 2019. seem just, but only at the moment. And if we ask the central bankers, we're unlikely to get a positive answer. Yesterday, Mario Draghi said it was too early to talk about a change in interest rate policy. What does all this lead to? A great deal of differentiation between the Fed's policies and the ECB, with the Federal Reserve remaining the strongest country. It follows that EUR/USD has somewhere to decrease. A simple look at the chart shows that until two months ago EUR/USD and the interest rate differential between Euribor and Eurodollar move together, the currency pair tends to follow the interest rates. In the present case EUR/USD = 1.1500 appears to be a fully achievable price in the coming months.
Source: Bloomberg Pro Terminal
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