EUR/USD: Natural gas to take the pair below parity despite ECB action – MUFG

Another day and another big jump in natural gas prices on the continent. Economists at MUFG Bank expect the EUR/USD pair to drop below parity.

Natural gas risk reinforcing the worsening growth outlook

“The growth outlook has now become the primary concern for the markets with the natural gas risk reinforcing the worsening growth outlook.”

“The ECB’s outdated concerns over market reaction to a bigger rate hike on top of the downside growth risks will keep EUR/USD under downward pressure with a parity test soon looking more and more likely.”