MUFG on the euro, says the fall since the US election a little overdone. Sees prospects for improvement ahead, citing (in brief)
- there is a risk that the European Central Bank cuts rates slower than the market expects, MUFG says exp[ectations for cuts are ‘excessive’
MUFG says that the European Central Bank is not super-responsive to slow growth, pointing out that when the Bank was hiking rates in ’22-’23 it wasn’t paying a lot of attention to weak growth. MUFG think the same might apply in 2025 if inflation rises (citing Trump[ trade policy and EU retaliation on this)
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EUR/USD update: