Forex analytics and overview

EUR/USD: Credit Suisse Woes Knock Down Euro, Will ECB Hike Today?

2023.03.16 07:57

MarketPulse

The euro rebounded on Thursday after sliding 1.5% a day earlier, its worst daily showing since September 2022. In the European session, is trading at 1.0613, up 0.35%.

The financial markets are in turmoil, with fears growing that the Silicon Valley collapse could lead to a full-blown banking crisis. Stock markets have fallen sharply and global banks took a hit on Wednesday after Credit Suisse Group (NYSE:) stocks plunged by 25%. Credit Suisse dragged the euro sharply lower and US Treasury yields and eurozone bonds also tumbled. Investors are understandably jittery and the lack of any action from the authorities is not helping matters.

ECB meets in the midst of market turmoil

How will this volatile situation impact the later today? Given all the market turmoil, it’s anyone’s guesses what ECB policymakers will do. The markets had priced in an 85% chance of a 50 basis-point increase last week, but that has been shaved to 25 bp since the SVB collapse. ECB President Lagarde had signaled very clearly that the central bank would raise rates by 50 bp, and if the ECB doesn’t deliver it risks damaging credibility. A pause in rates is unlikely, but given the ugly economic backdrop, such a move cannot be discounted.

in the eurozone is red-hot at 8.50% and remains the ECB’s number one concern. The current banking crisis may have shifted attention away from inflation, but the ECB will have to continue raising rates to bring inflation closer to the 2% target. The current market turmoil could lead the ECB to be more cautious at today’s meeting, but I expect that policymakers won’t shift their aggressive rate policy. The ECB will release an updated inflation forecast at the meeting, and if, as expected, the core rate projection is revised upwards, hawkish policy members at the ECB will be calling for more rate hikes.

EUR/USD Daily Chart

EUR/USD Technical

  • EUR/USD is testing resistance at 1.0718. The next resistance level is 1.0798
  • There is support at 1.0622 and 1.0542

Original Post

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 98,071.28 4.11%
ethereum
Ethereum (ETH) $ 3,474.58 2.64%
tether
Tether (USDT) $ 0.999468 0.03%
xrp
XRP (XRP) $ 2.29 1.93%
bnb
BNB (BNB) $ 702.67 1.15%
solana
Solana (SOL) $ 199.88 5.91%
dogecoin
Dogecoin (DOGE) $ 0.332576 3.52%
usd-coin
USDC (USDC) $ 1.00 0.15%
staked-ether
Lido Staked Ether (STETH) $ 3,471.85 2.65%
cardano
Cardano (ADA) $ 0.924957 1.84%
tron
TRON (TRX) $ 0.255948 1.75%
avalanche-2
Avalanche (AVAX) $ 40.76 6.01%
chainlink
Chainlink (LINK) $ 24.64 2.65%
the-open-network
Toncoin (TON) $ 5.89 5.29%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,114.70 2.47%
shiba-inu
Shiba Inu (SHIB) $ 0.000023 4.36%
sui
Sui (SUI) $ 4.56 1.83%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,596.15 3.69%
hedera-hashgraph
Hedera (HBAR) $ 0.312086 9.78%
stellar
Stellar (XLM) $ 0.387989 5.89%
polkadot
Polkadot (DOT) $ 7.44 1.99%
hyperliquid
Hyperliquid (HYPE) $ 29.68 0.13%
weth
WETH (WETH) $ 3,474.55 2.63%
bitcoin-cash
Bitcoin Cash (BCH) $ 462.29 1.34%
leo-token
LEO Token (LEO) $ 9.49 1.14%
uniswap
Uniswap (UNI) $ 14.21 1.47%
litecoin
Litecoin (LTC) $ 107.87 1.87%
pepe
Pepe (PEPE) $ 0.000019 3.61%
bitget-token
Bitget Token (BGB) $ 4.93 14.09%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,667.65 2.45%
near
NEAR Protocol (NEAR) $ 5.52 2.71%
ethena-usde
Ethena USDe (USDE) $ 0.999273 0.03%
aave
Aave (AAVE) $ 365.44 3.86%
aptos
Aptos (APT) $ 9.78 3.07%
internet-computer
Internet Computer (ICP) $ 11.23 5.50%
usds
USDS (USDS) $ 1.00 0.23%
crypto-com-chain
Cronos (CRO) $ 0.16084 0.69%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.519099 4.03%
vechain
VeChain (VET) $ 0.051606 7.79%
ethereum-classic
Ethereum Classic (ETC) $ 27.54 1.60%
mantle
Mantle (MNT) $ 1.22 1.95%
render-token
Render (RENDER) $ 7.78 2.20%
bittensor
Bittensor (TAO) $ 502.34 4.38%
mantra-dao
MANTRA (OM) $ 3.88 3.78%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.37 2.62%
whitebit
WhiteBIT Coin (WBT) $ 24.86 1.87%
monero
Monero (XMR) $ 193.99 3.40%
dai
Dai (DAI) $ 1.00 0.15%
arbitrum
Arbitrum (ARB) $ 0.80536 1.49%
filecoin
Filecoin (FIL) $ 5.39 4.70%