EUR/USD is struggling to recover after falling sharply last week. ING analysts report that the pair remains very heavy and could break below par at any time.
In addition to the sell-off, it is likely that the Asian central bank’s portfolio adjustment
“Asian FX remains under heavy pressure, will prompt Intervention sells USD and supports local currencies. Asian FX reserve managers will then need to sell EUR/USD to rebalance FX portfolios to benchmark weights.”
“Market expects 9 A 54bps rate hike is due at the 8th meeting. If the ECB wants to provide some support for EUR/USD, can it start discussing the prospect of a more aggressive rate hike? Watch out for any comments from the Nordic hawks this week.”
“EUR/USD will retry the July low of 0.9950 this week.”
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