EUR/USD now looks to the ECB – Danske Bank

Senior Analyst at Danske Bank Morten Helt noted the next risk event for the pair will be today’s ECB gathering.

Key Quotes

“USD is stronger after the Fed delivered the expected but still slightly hawkish hike and the US 10Y yield again rose above 3%. As expected, EUR/USD fell on impact but partially erased the initial move as Powell stressed that an inflation overshoot will be allowed (USD negative) and as a WSJ story separately reported on the more concrete plans for US tariffs on Chinese goods”.

“Today, while it is a close call, we are looking for the ECB to refrain from putting an end date on QE and thus expect EUR/USD to drop on the announcement and edge a bit higher on some nonetheless hawkish comments as Mario Draghi starts speaking”.

“Bottom line: the Fed and ECB in combination halting the recent EUR/USD rebound”.