Euro to weaken as ECB policy evolves and dollar strengthens

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National Bank of Canada Wealth Management: Euro to weaken as ECB policy expectations evolve and dollar appreciates on safe-haven demand.

Economists at National Bank of Canada Wealth Management (NBF) said the euro made some progress last month, gaining 2 cents. EUR/USD has since stabilized at levels slightly below May highs.

For now, the European Central Bank remains hawkish, boosting the euro, but data are starting to show that the broader euro zone economy is losing steam. Overall, we see the euro weakening as ECB policy expectations evolve and the dollar appreciates on safe-haven demand.