The euro could weaken against the dollar near term as markets trim U.S. rate-cut expectations after Thursday’s inflation data, Societe Generale Researchsaid.
U.S. money-market pricing of a March rate cut–which assigns a 68% probability–is premature, it said.
“EUR/USD has already tested 1.10 twice [this year] without managing to break upwards,” SocGen said.
“While we maintain a bullish EUR/USD forecast (towards 1.15) this year, downside risks will likely prevail in the near term.”