Backpedaling ECB could push euro under $1.10: JP Morgan AM

© Reuters. An employee counts Euro bills at a money exchange office in central Cairo

LONDON (Reuters) – The European Central Bank’s shift back toward lower interest rates could push the euro below $1.10 and invert the euro money market curve, JP Morgan Asset Management’s foreign exchange head said on Wednesday.

If the ECB signals that it will lower its already negative deposit rate in the months ahead, “the risks are now that we break the bottom end of the $1.12-$1.18 (euro-dollar) range that has persisted over much of the past year and could even test below $1.10,” JPM AM’s Currency Chief Investment Officer Roger Hallam said.

He added that with the ECB now appearing to be more willing to embrace a tiered deposit rate system that the “euro money market curve can flatten and potentially invert.”

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