EUR/USD: Current price action is a temporary setback – MUFG

Economists at MUFG Bank analyze EUR/USD outlook following Thursday’s ECB policy update.

ECB signals it is close to the end of their hiking cycle

We still believe current price action is a temporary setback for the pair rather than a sustained reversal lower given our expectation that further US Dollar weakness will lift the pair back into a higher range between 1.1000 and 1.1500 through the rest of this year. 

The main surprise was the clear signal from the ECB that it is close to the end of its hiking cycle.