The euro is expected to hold up this week, with the ECB’s tightening stance and concerns over France’s situation and slowing GDP growth acting as downside factors. The yen is also expected to be affected depending on the outcome of the BOJ monetary policy meeting.
The euro-dollar pair is expected to remain soft. The ECB Governing Council is expected to keep rates unchanged against a backdrop of inflationary pressure while maintaining its tightening stance.
Concerns over France’s fiscal and political situation, along with slowing GDP growth across the region, could weigh on the euro. If expectations for an additional rate hike in December build ahead of the FOMC meeting scheduled for the 27th-28th, stronger dollar buying is also possible.
The euro-yen pair may continue to hold up despite downside pressure. While the ECB’s hawkish stance could prompt initial euro buying, euro selling may gain the upper hand amid concerns over the situation in France and the outlook for slower GDP growth. If the BOJ monetary policy meeting produces no surprises, yen buying may be limited, potentially supporting the euro.