EUR/USD: Seen moving into a higher range after breaking 1.1000 – MUFG

The EUR/USD is moving with a bullish bias according to analysts at MUFG Bank. They see the pair trading in the range 1.0700 -1.1400 over the next weeks.

Key quotes:

“The EUR has continued to outperform other G10 currencies. The EUR is benefitting from the easing of last year’s negative terms of trade shock. The incoming economic data flow from the euro-zone is continuing to surprise to the upside although not as strongly as at the start of this year.”

“Fears over a sharper growth slowdown have also been eased by the quick action taken by the Swiss authorities to deal with concerns over the health of Credit Suisse that have helped reduce financial stability risks in Europe.”

“The better than expected growth outlook for the euro-zone economy is putting pressure on the ECB to raise rates further. We still expect the ECB to step down the pace of hikes at their next policy meeting on 4th May by delivering a 25bps hike but one can’t rule out another larger 50bps hike.”

“We expect EUR/USD to move up into a higher trading range after breaking above the 1.1000-level on a more sustained basis.”