According to Jin10 Data, ING analyst Turner said that the euro may continue to rise against the US dollar as the market bets that the Federal Reserve will cut interest rates more aggressively than the European Central Bank.
Turner noted that the continued decline in U.S. short-term interest rates has pushed the two-year euro-dollar swap spread down to 85 basis points, the lowest level of the year.
He also said that if the market digests the expectation of a rate cut by the European Central Bank at its October meeting, the gap could narrow further and the euro could rise to 1.1155 against the dollar.
