Yuxin Bank: Divergence in European and American central bank policies may push the euro against the dollar above 1.20

ME News report: On April 27 (UTC+8), strategists at YuXin Bank Investment Research Institute said that if the European Central Bank raises interest rates later this year and the Federal Reserve cuts rates, the EUR/USD exchange rate could recover to above 1.20. In their report, they noted that the European Central Bank is likely to keep interest rates unchanged on Thursday while it waits for more information about how the Iran war will affect inflation. However, they said the European Central Bank may raise rates in June and September. By contrast, the Federal Reserve may cut rates in December. The narrowing of the interest-rate differential could push EUR/USD to this year’s current high of 1.2078, although “this will require waiting until the risk premium triggered by the current war has fully dissipated.” (Source: Jin10)