MUFG Video - ECB Policy & EUR/USD Year-end Outlook

ECB Policy & EUR/USD Year-end Outlook

  • By Derek Halpenny
  • Oct 30, 2023

The ECB has paused its rate tightening cycle, but monetary tightening continues through balance sheet shrinkage, which is now the primary focus of financial markets.

In this video, Derek Halpenny, Head of Research, Global Markets EMEA and International Securities discusses
expectations, explaining that the FX impact will be primarily determined by the reaction in the BTP market, which could put downward pressure on the euro. Derek also discusses EUR/USD’s resilience, which has been remarkable, with the US Treasury 10-year yield, treasury yield premium over German bonds, BTP bond spread, and natural gas price in Europe suggesting EUR/USD should be a lot lower.

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