- Euro: ECB Talks Up Interest Rate Expectations
- U.S. Dollar: Retail Sales, Fed’s Beige Book on Tap
Speculation for higher borrowing costs in Euro-Zone pushed the EUR/USD to a fresh yearly high of 1.4519, and the exchange rate looks poised to test the 2010 high at 1.4578 as it maintains the upward trend dating back to January. European Central Bank board member Luc Coene said the April rate hike shouldn’t be written off as a one-time deal according to an interview with Trends magazine, and expects the economic recovery to gather pace over the coming months as monetary policy remains highly supportive. As the Governing Council toughens its stance against inflation, the central bank may see scope to reestablish its exit strategy going into the second-half of the year, and speculation for higher borrowing costs is likely to fuel the bullish sentiment underlying the euro as investors weigh the prospects for future policy.
