FXStreet reports that economists at Nomura are of the view the US rates move has further to go and EUR/USD should climb higher with it.

“From a market perspective the most important news is that the ECB has switched from an inflation target of ‘close to, but below, 2%’ to 2% identically, specified over the medium-term and symmetric in nature (i.e. that overshoots are seen as equally undesirable as undershoots).”

“We see it as a modestly dovish move at the margin, supporting our view that the ECB will need to expand its APP next year as and when the PEPP is wound down (what the ECB describes as a ‘forceful’” response to avoid sub-target inflation expectations becoming entrenched).”

“We are waiting for EUR/USD to break below 1.18 towards 1.17 before considering fading price action and for macro correlations to kick back in. Currently, the risk off in markets looks to be position reduction, with the catalysts for it unclear.”