EUR/USD retreats after hitting multi-month high – BBH

EUR/USD pulled back toward 1.1700 after testing 1.1800, as Germany’s IFO business expectations dipped slightly. The euro remains supported by the ECB’s steady policy stance versus expected Fed easing, BBH FX analysts report.

ECB likely to hold rates while Fed eases further

“EUR/USD plunged to near 1.1700 after testing a multi-month high at 1.1800 yesterday. Germany’s IFO business expectations index dips in December (actual: 89.7, consensus: 90.5, prior: 90.5) but remains indicative of an ongoing recovery in Eurozone economic activity.”

“ECB is in a good place to keep rates on hold for some time while the Fed has more easing in the pipeline. As such, relative ECB/Fed policy stance underpins the uptrend in EUR/USD.”