Although the ECB continues to scrutinise incoming information, including exchange rate developments, according to GC member Mersch, the Euro has extended its rebound vs the Dollar from recent sub-1.1700 lows beyond 1.1750 and option expiries between 1.1770-80 to exert a bit more pressure on the index within 93.767-207 parameters. Hence, Eur/Usd has resumed its inverse correlation with Usd, while also latching on to latest Cable fluctuations with the usual deviations due to Eur/Gbp cross moves. Some observers also point to the single currency’s tendency to track overall risk sentiment, bullion and Bitcoin, although Gold and the crypto have only been in sync sporadically and/or with time lags of late. However, Bund/T-note yield differentials have impacted given pronounced widening before consolidation as the 10 year German benchmark encounters support below -60 bp and the more hawkish ECB contingent, like Holzmann stick to the view that there is no need to deliver more stimulus at present.
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