ING FX Strategy Research notes that EUR/USD is starting to trade consistently above levels typically associated with short term interest rate spreads.
“We attribute that to speculation of ECB tapering this summer. We think the ECB will have to provide updates on the PSPP scheme either at its 20 July meeting or more likely its 7 September meeting.
We have a baseline view that Bund yields break higher in 3Q17, carrying EUR/USD to 1.15,” ING argues.
EUR/USD is trading circa 1.1120 as of writing.
Source: ING Global Markets Research
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