EUR/USD: Five factors that could trigger a correction lower – SocGen EURUSD Fed ECB China Banks
has been hovering around 1.10 for almost a month. In the current risk-on environment, economists at Société Générale think that investors should be mindful of a set of risks to our central scenarios that could revive volatility and trigger a transitory USD rebound.“May has been by far the worst month for EUR/USD over the past 20 years, with 63% of the years seeing a lower Euro. The average spot return was -2.9% in the 12 bearish years.
doesn’t fall fast enough, the Fed might be forced to rethink and possibly trigger a harder landing. A return to a hawkish path where the market no longer expect cuts would be painful and boost the Dollar.” “The latest Bank Lending Survey shows a sharp contraction in credit, suggesting that higher rates may already be undermining euro area activity amid upside core inflation risks. The euro area manufacturing PMI is now at its lowest level since June 2020.
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