EUR/USD: Unlikely to get a sustained boost even from a large rate hike by the ECB – UBS

The European Central Bank (ECB) is expected to hike its policy rate by 75 basis points (bps). However, such a move is unlikely to lift the euro, in the opinion of economists at UBS. 

EUR/USD to slump towards 0.96 by year-end

“The euro looks unlikely to get a sustained boost, even from a large rate hike by the European Central Bank. Investors will be looking to see if ECB policymakers opt for a 75 bps hike. While top ECB officials have become more hawkish recently, we expect worries regarding growth to dominate trading in the euro, especially following Russia’s decision last week to stop gas supplies via the Nord Stream 1 pipeline.”

“We still expect the euro to decline further to 0.96 versus the USD by the end of the year.”

See – ECB Preview: Forecasts from 12 major banks, even 75 bps is too little to lift the euro