In the Asian session on Monday (June 5), EUR/USD rose to 1.0691, a drop of 0.04%. The European Central Bank is expected to raise interest rates twice from now on, that is, to raise interest rates by 25 basis points each in June and July, with a terminal rate of 3.75%. After that, if core prices have slowed sufficiently, the ECB could end its rate hike cycle there.
The latest from the European Central Bank:
At that point, the market will be wondering when the ECB will deliver its first rate cut. Nomura still sees the first rate cut coming much later than market expectations, not until the end of 2024. Institutional analysis believes that the monetary policy of the European Central Bank will not provide further upward potential for the euro. Economists at Commerzbank expect the ECB to raise interest rates further at its upcoming June meeting. However, ECB Governing Council Villeroy said the remaining hikes would be marginal, confirming the views of the bank’s ECB watchers that further rate hikes face risks in the period after the next hike. Resistance will increase.
