Nordea: EUR/USD Upside Limited Due to Policy Divergence
Nordea research says EUR/USD upside is constrained by interest rate differentials and relative growth, as the ECB nears the end of its hiking cycle while the Fed continues.
Nordea analysts have warned that the euro's upside against the US dollar is limited in the coming months. The key driver is policy divergence between the European Central Bank and the Federal Reserve.
The ECB is seen as closer to the end of its tightening cycle compared to the Fed, which is expected to maintain higher rates for longer. Additionally, Eurozone economic data remains softer than US figures, further weighing on the euro.
This combination of interest rate differentials and relative growth dynamics suggests limited gains for EUR/USD in the near term.
Source: FXStreet Forex News