EUR/USD: Long-overdue ECB hawkish pivot in June unlikely to lift the euro – BofA

Economists at the Bank of America Global Research discuss their expectations for the June European Central Bank (ECB) policy meeting. In their view, the central bank is unlikely to try to talk up the common currency.

Market is already pricing the end of ECB QE in June

“We are waiting for the long-overdue ECB hawkish pivot in June, but we are not sure it will be enough to support the EUR.” 

“The market is already pricing the end of ECB QE in June, then 4 hikes this year and almost 4 more next year. we agree with the market for this year, but expect only 2 hikes next year.”

"We don't expect the ECB to try to talk the EUR up. The weak EUR is the symptom of the ECB's excessively loose monetary policies, rather than the cause of high inflation. In any case, the weak EUR/USD reflects more USD strength than EUR weakness.”