The EUR/USD rose further and printed a fresh six-week high at 1.0080 amid broad-based dollar weakness. It remains near the high, holding significant daily gains the day before the European Central Bank meeting.
The US dollar extended its correction lower on Wednesday during the American session amid a decline in US yields that reached fresh weekly lows. The DXY was falling almost 1%, trading below 110.00.
The European Central Bank will have its monetary policy meeting on Thursday. A 75 bps rate hike is expected. The decision, statement, and Lagarde’s press conference will likely impact the euro’s crosses.
Analysts at Rabobank doubt the possibility of the ECB sustaining a policy of large rate hikes after Thursday. They consider that taking into account the economic context, the central bank may be forced to slow the pace of its moves. “We continue to see scope for EUR/USD to drop to 0.95 into the winter months.”
Also, on Thursday, the US will report the first reading of Q3 GDP growth and the weekly jobless claims report.