MUFG Bank economists foresee challenges for the EUR/USD pair in making lasting upward movements in the short term. They emphasize the likelihood of the European Central Bank (ECB) pivoting sooner than the Federal Reserve (Fed).
The ECB’s cautious stance persists, with expectations of revised forecasts next week indicating cuts to GDP growth and inflation projections. While inflation forecasts for 2025 and 2026 are already near the target range of 2.1% and 1.9%, respectively, this could hinder any sustained upward momentum for the EUR/USD pair soon.