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EUR/USD outlook: Short-term weakness ahead of more gains?
While we maintain out longer-term positive EUR/USD outlook, we now think there is an increased risks of some short-term weakness in light of the dollar’s recovery against most other currencies. The further weakness in US data – most notably, industrial output – that we saw on Tuesday was offset by dovish comments from ECB’s Klaas Knot, who said that monetary tightening beyond next week’s meeting is not guaranteed, pushing back against market expectations for a September increase. But with the dollar managing to regain some lost ground against other currencies, most notably the pound as this morning’s ... (full story)