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- MUFG expect the EUR/USD to remain in range over the next week
MUFG expect the EUR/USD to remain in range over the next week
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Because of the disappointment that the ECB has provided yesterday, MUFG remains skeptical that the euro will keep going. The Fed is approaching, and the group expects the exchange rate to stay between 1.1050 and 1.1350 in the next week.
Draghi disappointed after failing to give the markets so much desired information on the impending interest rate cuts. It is clear that the bank is more likely to normalize itself in order to avoid a change in interest rates. This places the euro at risk, especially if the Federal Reserve cuts interest rates by more than 25 points.
However, the cut-off risk of 50 points has decreased dramatically. The recent agreement to raise the US debt ceiling, restarting talks between the US and China, and weaker US data make dollars at risk. Given these circumstances, MUFG retains its bearish mood against the euro. The strong signal from the ECB that they are planning a package of various lightening measures that can be implemented in September will keep the euro depressed in the months ahead.
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