Andrew Grantham, an analyst at CIBC, factors out that inflation charges within the US and the Eurozone are converging and he defined that would result in the ECB normalizing rates of interest earlier than year-end, a optimistic issue for EUR/USD.
“The divergence between key core inflation measures within the EZ and US has narrowed barely from earlier extremes, because of a modest easing stateside and marginal choose up in Europe.”
“That must also imply that the divergence in financial coverage can come down from extremes. After the one Fed hike that we anticipate this yr, the US will go on maintain and earlier than year-end the ECB may have began slowly normalizing rates of interest. That may present the following important leg larger for the euro towards the dollar.”