The EUR/USD pair regained the 1.1900 handle on Monday but economists at OCBC Bank expect the recovery to be temporary. What’s more, ECB Chief Lagarde opined that accelerating US inflation should have only a “moderate” impact on the eurozone whose “underlying price pressures are likely to remain subdued”.
“Comments from Lagarde still lean dovish, especially when set against the Fed, citing that EZ and US are in ‘different situation’ relating to inflation. She also mentioned space to cut interest rates if needed.”
“Relative central bank dynamics should continue to set the EUR softer against the USD.”
Near-term, the bounce above 1.1900 eased downward pressure, but we expect the reprieve to be temporary.”
“Multi-session targets at 1.1800 and and the April low of 1.1704.”
