Danske Bank: French fiscal risks weaken ECB rate hike expectations, euro faces downward pressure.

Danske Bank analyst Jesper Fjarstedt stated that concerns about France's fiscal situation caused the euro to fall to a 17-month low against the dollar. The market has doubts about the necessity of a near-term interest rate hike by the European Central Bank (ECB), expecting rates to remain unchanged on Thursday, with the probability of a December rate hike falling below 80%. Danske Bank anticipates the ECB will raise rates in December and end its tightening cycle; if this prediction is correct, the market is pricing in a policy rate approximately 45 basis points higher one year from now. (Source: Jinshi Data)