EUR/USD registered modest gains on Thursday and continues to edge higher toward 1.1250 on Friday. Economists at ING expect the world’s most popular currency pair to hold above 1.1200 into the weekend.
Holding above 1.1200 for now
“We see the euro as still vulnerable due to the Covid situation in Europe which is further widening US-EZ rate expectations.”
“A major question now is whether the new variant has already reached Europe (which is geographically closer to Africa). This could deal another blow to EZ sentiment and the EUR, which otherwise seems to have marginally benefited from its low-yielding status as the new variant shook markets and may hold above 1.1200 into the weekend.”
“We have heard some ECB members this week indicating that PEPP will end in March. Still, the EUR has been quite unreactive to policy comments with most of the focus on the current covid-related re-rating of EC growth expectations.”
