EUR/USD: STRENGTH IN THE COMING QUARTERS WILL NOT BE PERMANENT – COMMERBANK
EUR/USD has moved sharply higher, trading close to the 1.10 mark. Economists at Commerzbank analyze the pair’s outlook.
EUR/USD will peak as early as 2024
In the long term, it remains the case that while the ECB's policy will be surprisingly EUR-friendly from today's perspective, the risk of renewed inflationary episodes will remain high in the medium term, partly as early as 2024, but especially in 2025. The ECB will do more than the market currently expects, but too little to eliminate inflation risks. This should be reflected in a (negative EUR) risk premium.
Moreover, even if the real economy in the US is in a weak phase (which we continue to expect in summer 2024), its end will be foreseeable at some point. A long-term US growth advantage should then become more plausible and lead to USD strength again, as it has until recently.
We therefore continue to believe that the EUR/USD will peak as early as 2024 and that the EUR/USD strength we expect in the coming quarters will not be permanent.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.