MUFG note that the euro may continue to rise following a boost from China’s stimulus measures announced on Tuesday
- “Increased global growth optimism will help and the stimulus measures announced by China will certainly add to dollar selling momentum”
MUFG add that especially since the European Central Bank (ECB) is unlikely to hasten interest rate cuts as some anticipate.
While market expectations for an ECB rate cut in October are increasing, the bank is expected to maintain a cautious stance on cutting rates until core inflation is closer to its target, even amid slowing growth.