The ECB has paused its rate tightening cycle, but monetary tightening continues through balance sheet shrinkage, which is now the primary focus of financial markets. In this video, Derek Halpenny, Head of Research, Global Markets EMEA and International Securities discusses expectations, explaining that the FX impact will be primarily determined by the reaction in the BTP market, which could put downward pressure on the euro.

Derek also discusses EUR/USD's resilience, which has been remarkable, with the US Treasury 10-year yield, treasury yield premium over German bonds, BTP bond spread, and natural gas price in Europe suggesting EUR/USD should be a lot lower. Watch the video to learn more.

Key points

• 00:23 - There are two more ECB meetings in 2024. Is the ECB's tightening cycle now over?
• 02:05 - And how do you see the EUR/USD performing through the remainder of this year?

You can view more insights from Global Markets Research on their dedicated website.

Listen to our podcasts: The Global Markets FX Week Ahead Podcast and The MUFG Global Markets Podcast on Fridays.

Follow Derek Halpenny, Lee Hardman, and Ehsan Khoman on Twitter for more global markets insights.