Antje Praefcke, FX Analyst at Commerzbank, does not expect the EUR/USD pair to ease much below 1.06.
Euro is likely to keep up quite well
“The Fed will receive some important information, such as the PCE index on Friday, the leading indicators (ISM index) as well as the labour market report and inflation data for February. All of these might push market expectations for the key rate a little further upwards and make the market more confident that the cycle will only end at 5.50%.”
In case of strong data, the Dollar might therefore appreciate a little further, but as expectations have also risen that the ECB might get into a similar situation, i.e. that its cycle will take longer and will go further, the Euro is likely to keep up quite well.”
“I do not expect EUR/USD to ease much below 1.06, but the lower end is nonetheless likely to remain the weaker one for now.”