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Euro: Thumbnail Sketch Ahead of the ECB Meeting
The euro has traded between roughly $1.0485 and $1.1100 so far this year. The average is about $1.08, where it traded above yesterday for the first time in 2 ½ weeks. Recall that the euro rallied from around $1.05 in mid-March (amid speculation that the banking stress was going to force the Fed to cut) to around $1.1100, where it stalled in late April and early May. We argued that the rate cut expectations had swung too far and that as they converged back with the Fed the dollar would recover. The euro hit a low at the end of May near $1.0635. The interest rate adjustment we anticipated looked complete or nearly so ... (full story)