Summary:
The euro rebounded against the dollar, hitting a three-week low of 1.07785 post-ECB hawkish remarks on no future rate hikes.
The euro firmed on Wednesday against the dollar after dropping to its three-week low of 1.07785 in the previous session after an ECB’s hawk signalled no rate hikes going forward.
The dollar which stayed relatively strong for the better part of this year will loosen its grip on the Forex Market in 2024 given the Fed was expected to start cutting interest rates next year, a Reuters poll of FX strategists found.
While they expected the currency's weakening to continue into next year, median predictions showed a majority of the falls coming in the later part of 2024.
The euro was expected to end Dec at 1.08 per dollar, around the current level it trades. And it was seen to hit 1.09, 1.10 and 1.12 in a span of three, six and twelve months.
Strategists were bullish on emerging market currencies but the Turkish lira and South Africa's rand which lost around 35% and 10% respectively this year were not predicted to recover losses anytime soon.
The euro will likely continue to be pressured by Europe’s slower growth than that in the US. After Moody’s cut China credit outlook to negative, it seems even more difficult for the bloc to play catch-up.
Intraday bias in the euro remains on the downside for the moment. The 50 EMA is where it may find some support and a fall below this level could see a retreat towards 1.70.
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