EUR/USD: Narrowing yield differentials and weaker external sentiment likely to weigh on the Euro

The ECB raised its key policy rate by 25 bps to a record high of 4% in September, while consensus was fairly evenly split. The EUR failed to make any

Lower for longer

A shift lower in EUR rate expectations from here, alongside the potential for US rate cuts to be priced out of the market, makes downside potential for EUR/USD most compelling. The external environment also does not appear to offer much solace for the EUR, with ongoing signs of global growth slowdown, amid the impact of monetary tightening.Information on these pages contains forward-looking statements that involve risks and uncertainties.

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