Analysis, in brief, from MUFG. Notably this was from prior to the French vote of no confidence in the Prime Minister. MUFG reading the future:
- “We are not expecting the pick-up in political uncertainty in France to derail the euro’s current upward trend and/or encourage the ECB to cut rates further at the current juncture”
- Euro strength from favorable monetary policy divergence between the Federal Reserve and European Central Bank
- Fed is expected to resume cutting at its September 17 meeting
- Compared with the ECB signaling a higher hurdle for further rate cuts, likely to be on hold on Thursday
MUFG forecasts EUR/USD above $1.2000 by year-end.
