Euro: Choppy range view holds against US Dollar – Rabobank

Rabobank's Senior FX Strategist Jane Foley describes EUR/USD as wary after the July European Central Bank (ECB) meeting. Foley notes that the Euro (EUR) failed to gain support despite a hawkish ECB tone, while the Dollar benefits from safe haven demand and Federal Reserve (Fed) expectations. Foley still expects EUR/USD to trade in a choppy range around 1.14 over a 1-to-3-month horizon.

Euro struggles as Dollar stays supported

"Despite the hawkish takeaway from the July ECB policy meeting, the EUR failed to find support."

"CFTC speculators’ position data highlight that since the start of the Iran war, confidence in the EUR has been at a low ebb."

"At the same time, the USD has benefitted from a combination of safe haven flows and hawkish expectations regarding the Fed."

"Continued intensification of the Iran war has the potential to boost safe haven flows and hawkish Fed calls further."

"For now, however, we maintain our view that EUR/USD is likely to trade in a choppy range around the 1.14 level on a 1-to-3-month view."