EUR: Two Drivers, One Signal

EUR/USD faces downward pressure from narrowing policy and growth spreads against the USD, compounded by Middle East geopolitical risks. Meanwhile, the RBA and BoE face challenges related to wage-driven inflation and weakening consumer credit, respectively.

Key Takeaways

• 1.EUR/USD is under pressure from both narrowing nominal rate spreads (policy outlook) and real rate spreads (growth outlook).
• 2.Geopolitical tensions between the US and Iran/Middle East are weighing on global sentiment and maintaining a negative energy shock for Europe.
• 3.The RBA faces a dilemma as significant wage increases for minimum and award workers risk entrenching inflation despite slowing Q1 growth.

Table of Contents

• Asia overnight
• EUR: two drivers, one signal
• GBP: on credit?
• AUD: tough choices ahead
• Introducing RMA!
• Open trade recommendations
• Key events
• FX Research advanced tools
• Red Mount Analytics
• Our new interactive data website features:
• Global Markets Research contact details
• Certification
• Foreign exchange disclosure statement to clients of CACIB
• Additional recommendation obligations
• Valuation and methodology
• MiFID II contact details
• Disclaimer

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