Today Thursday (August 25), the Asian plate. The euro was quoted at 0.9988 against the dollar, an increase of 0.15%. The EUR/USD pair traded back and forth within a narrow range of 0.9944-0.9956. Inflation could also climb in the euro zone due to higher gas and electricity prices. This could complicate possible stimulus measures by the ECB, which could be forced to keep raising interest rates.
ECB Update
JPMorgan believes the euro zone economy will be in a “deep recession” by the end of the year, driven by soaring gas prices and further interest rate hikes by the European Central Bank. Revised forecasts by JPMorgan show that Europe is “running out of gas” even faster than initially thought as Russia continues to suspend gas exports to the euro zone.
Energy import costs in Europe have tripled in recent months, from around 200 billion euros a year (1.6% of euro area GDP) to around 800 billion euros (6.4% of GDP) today. Depending on the dynamics of natural gas supplies, the region’s energy import bill could be higher, at around 8.5 percent of GDP: an obvious revenue shock, Fuzesi said. Higher gas prices are expected to spur demand reductions, while supply shortages are insufficient to warrant mandatory gas rationing. Complicating the European economy, inflation is also likely to climb due to rising gas and electricity prices. That could complicate possible stimulus measures from the ECB.
Euro technical analysis
During the Asian session, the EUR/USD pair traded in a narrow range of 0.9944-0.9956. The asset has traded sideways after a modest correction from above the magic number 1.0000. Considering the broader context, the downside of the EUR/USD pair remains in favor.
Reminder: The Fed is expected to slow down the pace of interest rate hikes, and whether the dollar can maintain its upward trend will wait for Powell’s speech. The European energy crisis continues to weigh on the euro. For specific operations, please pay attention to the Jintou.com APP. The market is changing rapidly, investment needs to be cautious, and the operation strategy is for reference only.