EUR/USD could stage a modest recovery in the coming few weeks – HSBC

Economists at HSBC expect the Euro to appreciate in the coming weeks.

EUR could benefit from a clear indication of further tightening

“Barring exceptionally hawkish US data or geopolitical deterioration, we believe EUR/USD could stage a modest recovery in the coming few weeks.” 

“The EUR has been slow to capitalise on the combination of an improving growth/inflation mix alongside a still-hawkish ECB. It may be better placed to gain as upward USD momentum falters.” 

“For the ECB meeting on 16 March, the key for the EUR is how President Lagarde guides expectations for the May meeting and beyond. Any strong hints that the tightening pace is set to slow to 25 bps could weigh on the EUR. Conversely, the EUR could benefit from a clear indication of further tightening. The balance of risks may tip the needle in favour of the EUR.”