Near-term ECB policy outlook has been the driver of EUR volatility this week. A diverging monetary plicy between Fed and ECB is set to boost the Euro, according to economists at MUFG Bank.
ECB policy rate to reach 3.00% by the end of this quarter
“We are sticking with our forecast for the policy rate to reach 3.00% by the end of this quarter. A scenario that is not fully priced into the eurozone rate market which is currently expecting a total of 93 bps of hikes to be delivered at the February and March policy meetings.”
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