EURUSD gains ahead of ECB increase
As the ECB is likely to raise interest rates by 25 basis point, the euro will firm up. Eurozone headline inflation may have slowed last month, but core readings remain stubbornly high. The euro may be able to benefit from the improved fundamentals as well as the catch-up effects. Contrary to the sentiment of a few months back, recessionary pressures across the bloc have eased. While the US counterpart will deliver a final increase, the ECB still has room to go a little further. The market is settling on a 25-bp increase, but an upside move of 50 bp would be possible. The pair is headed towards 1.1250 The following are some examples of how to use 1.0850 As the closest support.
AUDUSD softens over dim economic outlook
The Australian dollar is struggling amid weak global economic data. The fall in core consumer price in the first three months of the year caught the market off guard and could confirm inflation is past its peak. The market would be less likely to demand another rate hike in the month of April, as traders expect the RBA’s cash rate to remain unchanged. This dovish attitude could increase caution on the commodity markets. As traders have…
