EUR/USD TO EDGE HIGHER IF THE FED AND THE ECB START THEIR RATE-CUTTING CYCLES AT THE SAME TIME – COMMERZBANK
Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes what synchronized Fed and ECB rate cuts would mean for EUR/USD.
The Fed has typically moved its key rate much more and with greater amplitude than the ECB
Anyone managing USD and EUR risk has to rely on experience to make forecasts. And experience shows that the Fed is the more ‘active’ of the two central banks. It has typically moved its key rate much more and with greater amplitude than the ECB.
Even its last interest rate cycle from 2015 to 2018, whose amplitude seemed puny compared to the 1990s and early 2000s, is no exception. The ECB skipped this rate cycle altogether.
This means that if the Fed and the ECB start their rate-cutting cycles at the same time, ceteris paribus, this is an argument for higher EUR/USD rates. Until it becomes clear what the Fed's and ECB's rate cycles will look like this time around.
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.