EUR/USD targets July high at 1.1829 – BBH

EUR/USD is firming toward its July high as resilient Eurozone data and a steady ECB policy stance underpin the uptrend, while relative Fed dovishness continues to favor the euro, BBH FX analysts report, BBH FX analysts report.

ECB policy stance supports euro resilience

"EUR/USD is up and eyeing a test of its July high at 1.1829. The ECB remains in a good place to keep rates on hold. Eurozone labor costs rose to 3.6% y/y in Q2 vs. 3.4% in Q1. However, the ECB negotiated wage tracker points to labor costs growth slowing further in line with the ECB’s 2% inflation target."

"In parallel, the German ZEW investor economic sentiment index unexpectedly improved to 37.3 in September (consensus: 25.0) vs. 34.7 in August, consistent with resilient economic activity. Bottom line: ECB/Fed policy stance continues to underpin the uptrend in EUR/USD."