EUR/USD Hits One-Week High on Hawkish ECB Hike Expectations
The EUR/USD pair has been trading flat in North American sessions, reaching a one-week high after a hawkish European Central Bank (ECB) rate hike expectation. According to Scotiabank strategists Shaun Osborne and Eric Theoret, the market is fully pricing in a 25 basis point hike this Thursday, followed by another in December.
Osborne and Theoret anticipate a hawkish hike from President Lagarde, who will unveil the latest forecast and signal ongoing concern about upside risk. The ECB's greater sensitivity to energy price risks in the current environment has led to firming rate expectations, reflecting higher oil prices.
The strategists note that there is limited resistance ahead of the 1.1680/1.1700 area, with support below 1.1580. While the EUR recovery is tentative and negligible, spot tests marginal one-week highs in the mid-1.16s.