Balance of Risks Are Stacking Up Against Euro -- Market Talk

Dow Jones06-12 21:27

1327 GMT - The euro has proved relatively stable despite geopolitical tensions, but the balance of risks is stacking up against the exchange rate, HSBC analysts say in a note. "Crucially, the monetary outlook favors the dollar." While the market prices further European Central Bank interest rate rises, HSBC expects cuts in 2027. Rate differentials could therefore swing in favor of the dollar, particularly if the Federal Reserve shifts to signaling policy tightening, they say. The euro's underlying position is also weakening due to structural headwinds, they say. The eurozone's current account surplus has narrowed as its manufacturing competitiveness deteriorates. Political risk could also rotate back to Europe as the April 2027 French election approaches, they say. The euro falls 0.1% to $1.1565. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

June 12, 2026 09:27 ET (13:27 GMT)

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Rate differentials could therefore swing in favor of the dollar, particularly if the Federal Reserve shifts to signaling policy tightening, they say. The euro's underlying position is also weakening due to structural headwinds, they say. The eurozone's current account surplus has narrowed as its manufacturing competitiveness deteriorates. Political risk could also rotate back to Europe as the April 2027 French election approaches, they say. The euro falls 0.1% to $1.1565. 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Rate differentials could therefore swing in favor of the dollar, particularly if the Federal Reserve shifts to signaling policy tightening, they say. The euro's underlying position is also weakening due to structural headwinds, they say. The eurozone's current account surplus has narrowed as its manufacturing competitiveness deteriorates. Political risk could also rotate back to Europe as the April 2027 French election approaches, they say. The euro falls 0.1% to $1.1565. (renae.dyer@wsj.com) \n</p>\n<pre style=\"white-space: pre\">\n \n</pre>\n<p>\n  (END) Dow Jones Newswires\n</p>\n<p>\n  June 12, 2026 09:27 ET (13:27 GMT)\n</p>\n<p>\n  Copyright (c) 2026 Dow Jones &amp; Company, Inc.\n</p>\n</font>\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"HSBH","symbol_name":"HSBC Holdings plc ADRhedged","start_time":0,"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","article_id":"2642295616","we_media_id":"106","thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2642295616","pubTimestamp":1781270820,"columns":[],"sourceInfo":null,"weMediaInfo":{"media_name":"Dow Jones","introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"summary":"1327 GMT - The euro has proved relatively stable despite geopolitical tensions, but the balance of risks is stacking up against the exchange rate, HSBC analysts say in a note. \"Crucially, the monetary outlook favors the dollar.\" While the market prices further European Central Bank interest rate rises, HSBC expects cuts in 2027. 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Rate differentials could therefore swing in favor of the dollar, particularly if the Federal Reserve shifts to signaling policy tightening, they say. The euro's underlying position is also weakening due to structural headwinds, they say. The eurozone's current account surplus has narrowed as its manufacturing competitiveness deteriorates. Political risk could also rotate back to Europe as the April 2027 French election approaches, they say. The euro falls 0.1% to $1.1565. 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