**As seen in Online Tools > Chart Grid, get access now! cablefxm.co.uk
The euro is now set to post its best week vs the dollar in more than 15 years. Divergence in the economic prospects, a slightly more hawkish ECB, and fiscal plans from Germany are doing the rounds.
However, looking at historical drivers in the EUR/USD, the upside is supported by outperformance in EU equities over U.S., this is shown in the lower left of the chart grid. The Stoxx 50 index has risen above 10.0% so far this year while the S&P 500 index gave up 2025 gains this week.
Also, the upper charts show the divergence in rates, the dump of German Bunds has narrowed the yield differential to U.S. Treasuries. The spread is now at 150bps, a level not seen since September.
If these trends continue, we could see EUR/USD testing the 1.10 level during 2Q.
Comments