EUR/USD has tested parity but has failed to break sustainably that key level. Economists at BBH believe that the pair is still on track to test the September 2002 low near 0.9615.
Minutes of the European Central Bank underline its new approach to normalisation
“EUR/USD should continue to have trouble making much headway above 1.00. We believe the pair remains on track to test the September 2002 low near 0.9615.”
“The account of the ECB’s July meeting is worth discussing. The bottom line is that the ECB will continue to hike rates and simply hope that the market doesn’t test its resolve to keep peripheral spreads lower.”
“We believe the account reflects ongoing reluctance of the creditor nation to unconditionally support the debtor nations. This is a dangerous stance to take as the September elections in Italy approach.”