Euro Fundamental Forecast: Bearish
It’s difficult to consider the Euro[1]’s potential without considering the glaringly obvious differences in the path to normalization for the ECB[2] when compared to other major central banks. Admittedly, the Eurozone is very different in its make up to other single countries but right now its difficult to see signs of Euro strength.
While the ECB is expected to maintain its dovish stance on rate hikes and inflation over the medium term, the Fed has ramped up already ambitious expectations when it comes to the pace and frequency of rate hikes this year. The dollar shot up after Wednesday’s FOMC[3] meeting and press conference, which was most evident via the EUR/USD[4] pair and US Dollar[5] Index (DXY). The Euro has shot down in the list of currencies compared to the US dollar and currently trades around 2% lower in 2022 thus far.
Source: Refinitiv
Italian elections continue to drag out A point to note as the week comes to a close is that there is still no consensus on who the next Italian president will be. The drawn out process of voting every day until a president is elected has been acknowledged as inefficient but the antics and deal striking behind the scenes has been said to provide somewhat of a theatrical experience for the Italian public and attracts many viewers.
Further reports suggest that on Thursday, lawmakers made some headway as nominations of serious candidates were put forward. Before then, numerous ballots were cast for the deceased former prime minister Bettino Craxi and were subsequently set aside. In Italy anyone can be president as long as they are alive, Italian and over 50 years of
