- BofA anticipates the ECB will cut interest rates more aggressively than the market currently expects, which could lead to further declines in the EUR/USD pair.
Bank of America (BofA) anticipates that the European Central Bank (ECB) will reduce interest rates more aggressively than what is currently reflected in the EUR/USD.
This expectation is driven by doubts surrounding the ECB’s estimate of the neutral rate and shifting savings and investment patterns within the Euro Area.
Even so, the EUR/USD has dropped to a new weekly low of 1.0950. With the U.S. dollar maintaining a bullish trend across the FX market, the pair may decline further, potentially testing the next support level at 1.0910.
If BofA’s forecast holds true, EUR/USD could revisit the lower highs seen in August and July, signaling a deeper pullback.