EUR/USD Consolidates Gains Amid Expectations of ECB Rate Hike
The EUR/USD pair has consolidated its gains after reaching a three-month high of 1.1711 earlier this week, trading around 1.1651 at the time of writing.
Despite showing early signs of cooling momentum indicators, the Euro remains in favour due to the near-term fundamental and technical backdrop, with strategists at Brown Brothers Harriman noting that ECB tightening expectations underpin EUR.
The swaps curve has fully priced in a 25bps ECB rate hike to 2.50% at the next September 10 meeting and a total of 60bps of tightening over the next twelve months, according to them.
From a technical perspective, EUR/USD has maintained an uptrend since the start of the month, reclaiming key Simple Moving Averages (SMAs) and forming higher highs and higher lows.