Euro Supported by Expectations of Further ECB Tightening, Analyst Says

The euro was supported by expectations that the European Central Bank could raise interest rates again in September. According to Jin10, ING Group analyst Chris Turner said those expectations were underpinning the currency. Turner said renewed U.S.-Iran tensions pushed oil prices sharply higher on Wednesday, but the euro remained resilient. He attributed that resilience to a narrowing yield differential moving in the euro’s favor, with euro swap rates rising more than short-end U.S. rates. However, Turner said the outlook for further Federal Reserve rate hikes was a more dominant theme, which could pull EUR/USD back below 1.14.