EUR/USD: Hungarian political developments provide short-term backing – ING
EUR/USD Holds Steady Amid Oil Price Surge and Hungarian Election Results
Chris Turner from ING reports that the EUR/USD currency pair faced downward pressure in Asian trading due to rising oil prices following unsuccessful peace negotiations. Despite this, the pair remains above the 1.1600 mark. Turner points out that Hungary's recent pro-European Union election outcome is a positive factor for the Euro, and he considers 1.1700 to be a stable target in the short term. Expectations for a European Central Bank rate hike in June continue to be strong.
Hungary’s Pro-EU Shift and ECB Outlook
There are a couple of reasons why energy prices haven't climbed further and equity markets haven't dropped today: firstly, the Iranian delegation participated in talks in Islamabad, and secondly, the region has so far avoided renewed attacks on energy infrastructure, preventing lasting damage.
Turner notes, "EUR/USD came under pressure in Asia as oil prices jumped after peace talks failed. However, since the parties involved have not resumed destruction of energy facilities, the situation could have been more severe."
He adds, "This is why EUR/USD isn't trading closer to 1.1600. Additionally, developments in Hungary are likely helping to limit further declines. The strong pro-EU stance among Hungarian voters is encouraging news for Brussels and may cause Euro-sceptic parties across Europe to reconsider their positions."
"Unless energy prices surge again today, we believe EUR/USD will find support around 1.1700 in the near term. The economic calendar is relatively quiet, but Luis de Guindos will be the first of several European Central Bank officials to speak this week."
"It may be premature for the ECB to completely dismiss the possibility of an April rate hike, though it appears unlikely. However, market expectations for a June rate increase remain firm, with 22 basis points currently priced in."
(This article was produced with assistance from an AI tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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