ECB Tightens Further, But Euro Remains Weak Against Dollar

The European Central Bank (ECB) continues to signal its intention to tighten monetary policy further, but this hawkish stance has not yet translated into a stronger Euro against the US dollar.

EUR/USD is currently trading near July's low at around 1.1371, having fallen in six of the past eight sessions and down about 0.4% for the month so far.

ING and Nordea both expect the ECB to maintain a hawkish bias, with further interest-rate increases still likely.

Nordea forecasts three additional 25-basis-point rate hikes in September, December, and March 2027, which would lift the deposit rate from 2.25% to 3.00%, while ING sees the pair remaining supported by higher Eurozone rates but retains a near-term downside bias towards 1.1380.