MUFG: Energy Risks Keep ECB Hawkish, Support EUR/USD
MUFG's Derek Halpenny notes that elevated LNG prices versus pre-conflict levels keep Eurozone inflation risks, supporting a hawkish ECB bias and potential EUR/USD gains from USD weakness.
MUFG analyst Derek Halpenny highlights that lingering energy risks, particularly elevated LNG prices compared to pre-conflict levels, continue to sustain Eurozone inflation concerns. This keeps the European Central Bank's policy bias tilted hawkish, which in turn could support the euro.
Halpenny also points out that EUR/USD may benefit from US Dollar weakness. The combination of a still-hawkish ECB and a softer USD creates a favorable backdrop for the pair to move higher.
No specific price targets or timelines were provided in the note.
Source: FXStreet Forex News