Euro Stumbles Amid Safe Haven Demand, Hawkish Fed Expectations
Rabobank's Senior FX Strategist Jane Foley sees the Euro (EUR) struggling to gain support after the July European Central Bank (ECB) meeting, despite a hawkish tone. The EUR failed to find support, while the Dollar benefits from safe haven demand and Federal Reserve (Fed) expectations.
Foley points out that CFTC speculators' position data indicates low confidence in the EUR since the start of the Iran war. This lack of confidence has contributed to the EUR's struggles.
The USD has benefitted from a combination of safe haven flows and hawkish expectations regarding the Fed, which could intensify further with continued tensions in the Iran war.
For now, Rabobank maintains its view that EUR/USD will trade in a choppy range around 1.14 on a 1-to-3-month horizon.