EUR/XCD Outlook:
The EUR/XCD exchange rate is slightly positive, trading above its recent average and within a stable range. The current economic indicators suggest continued support for the euro but without any strong directional drivers.
Key drivers:
• Rate gap: The European Central Bank has a firmer grip on monetary policy than the Eastern Caribbean Central Bank, which may highlight the euro's strength.
• Risk/commodities: Oil prices are notably above average, which may support the euro as higher prices can boost economic activity in Europe.
• One macro factor: Recent improvements in Germany's business climate boost outlooks for the eurozone's economy and overall euro strength.
Range:
The EUR/XCD is likely to hold within its recent range due to the lack of powerful drivers pushing it significantly higher or lower.
What could change it:
• Upside risk: An unexpected positive policy change from the ECB could further support the euro.
• Downside risk: Renewed concerns about EU-US trade relations may adversely impact the euro's value.
