EUR/USD could increase further and challenge the 1.10 level, economists at HSBC report.

Key local driver is likely to be core inflation

“The key local driver is likely to be core inflation, which has continued to push higher. We believe it can nudge higher still. Germany will reveal its preliminary March data on 30 March, with France and the Eurozone aggregate data out the next day.”

“EUR/USD is vulnerable to any ‘risk off’ mood but, barring surprises, a test of 1.10 level is likely over the near term, supported by rate differentials.”