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EUR/USD: Oil relief but fiscal risks linger – BBH

Source Fxstreet

Brown Brothers Harriman (BBH) reports EUR/USD has bounced toward 1.1200 resistance after briefly trading near 1.1130, helped by lower Oil prices easing the energy drag on Eurozone growth. However, the bank warns that France’s ongoing fiscal troubles could still push EUR/USD down to 1.1000, keeping the pair vulnerable despite improved risk sentiment and energy dynamics.

Energy support versus fiscal headwinds

"EUR/USD recovered towards resistance at 1.1200 after testing an intra-day low around 1.1130 on Friday. Lower crude oil prices ease the energy drag on Eurozone growth and offers EUR support. However, France’s ongoing fiscal troubles can still drive EUR/USD down to 1.1000."

"Both contenders for the ECB presidency struck a pragmatic tone in newspaper interviews. Netherlands’ Klaas Knot noted that further tightening should be limited if energy prices remained roughly where they were, while signaling readiness to tackle disorderly bond market moves. Spain’s Pablo Hernandez de Cos stressed the “need to remain vigilant about inflation risks” but noted that second-round effects have yet to emerge."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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