EUR/XCD Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and near recent highs, with limited clear drivers.
Key drivers:
• The European Central Bank's (ECB) stable monetary policy and projected inflation decline support the euro's strength against the XCD.
• Oil prices have recently surged, reflecting higher demand trends, which may positively influence the euro's value given its negative correlation with the US dollar.
• The slight economic growth slowdown expected in the East Caribbean may put some pressure on the XCD.
Range: Expect the EUR/XCD pair to hold within its recent range, with potential for minor fluctuations.
What could change it:
• Upside risk: A resolution to the Ukraine conflict could restore confidence in the euro, pushing the exchange rate higher.
• Downside risk: Further significant declines in tourism demand could weaken the XCD, impacting the exchange rate negatively.