EUR/USD is trading around the 0.9750 area. Economists at ING expect the world’s most popular currency pair to challenge the the 0.9540 September lows in the short-term.
Gas price corridor on the way?
“The euro should remain heavily impacted by sterling’s swings in the near term, and here the correlation appears to be stronger on the downside: i.e. the spillover from another sell-off in gilts would likely have an asymmetrically larger impact on the euro than the positive implications of a recovery in UK sentiment.”
“The proposal of a price corridor for wholesale gas transactions was set to be explored: this may be a bridge between the requests for capping gas prices and the concerns that a fully-fledged cap would lead to increased consumption. The content of the coordinated measures could have a more long-lasting impact on the euro than the ECB’s policy direction, at this stage.”
“We still think that EUR/USD will test the 0.9540 September lows in the near-term, and extend a drop below that level by year-end.”
