Euro Could Fall Further if ECB Rate-Rise Prospects Dim

Dow Jones10-22 21:53

1353 GMT - The euro could fall further if markets further pare expectations for interest-rise rises by the European Central Bank, Morgan Stanley analysts say in a note. Investors could possibly conclude that tighter financial conditions, driven by wider spreads between European government bonds, will lead to fewer hikes than priced, they say. "This scenario could create scope for further euro declines, with the euro falling to $1.10 and 0.90 Swiss francs." The euro falls 0.3% to $1.1198 and drops 0.4% to 0.9218 Swiss francs, having earlier reached a three-and-a-half-month low of 0.9193 francs, according to LSEG. The spread between 10-year French and German government bond yields reaches the widest since late 2011 at 177.72 basis points.

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