Exchange Rates & Currency Deals

Bias Bearish-to-range-bound, as USD/EUR sits below the 90-day average and in the lower half of the three-month range. Key drivers - Rate gap: The Fed is seen easing toward a neutral rate while the ECB stays on hold in a neutral corridor, narrowing the USD’s edge and supporting the euro over the medium term. - Oil trend: Oil sits near 30-day highs with notable volatility, which can bolster inflation concerns and push the dollar higher relative to the euro; energy costs in Europe remain a key factor, limiting euro gains when prices stay firm. - Macro: Eurozone inflation is expected to ease toward the ECB’s target, helping the euro hold ground versus the dollar, while growth momentum and core prices keep policy dynamics in view. Range Expect USD/EUR to drift within the three-month range, with a tendency to test the lower end if the dollar gains. What could change it - Upside risk: A stronger-than-expected US payrolls print or hawkish Fed messaging could lift the dollar. - Downside risk: Softer US data or clearer ECB easing signals could lift the euro. USD/EUR bearish-to-range below the 90-day avg, in the lower half of the 3-mo range. Fed easing toward neutral while ECB holds narrows USD edge and supports EUR. Oil near 30-day highs adds inflation risk; euro gains hinge on eurozone data