ECB confirms June rate increase
The ECB left interest rates unchanged at 2.50% at today’s meeting, but the testimony afterwards left no real doubt that rates will be increased in June to 2.75%. US dollar sentiment remains very weak, but care will be required as there will be some pressure to curb positions ahead of the Friday US payroll data. For now, the pattern is likely to remain one of weak dollar corrections stronger followed by fresh Euro buying interest. A EUR/USD move to 1.2720 should certainly not be ruled out, but Euro buying looks to offer little value at current levels.