EUR/USD: There will likely be a deadlock for now – Commerzbank
|EUR/USD remains to trade below the 0.99 mark. Economists at Commerzbank note that there is a deadlock in the world's most popular currency pair.
The speed od Fed rate hikes will ease somewhat
“It should not come as a complete surprise that the FOMC is beginning to refer to the fact that the steps will be smaller as of December and this should not put much pressure on the dollar. However, that also means that monetary policy will not provide further support for the dollar, but that this argument has now been sucked dry.”
“ECB members have signaled that a recession should not prevent the central bank from pursuing its normalization process though. In view of very high inflation rates, it would be necessary to act much more decisively as otherwise inflation expectations risk becoming de-anchored. In case of too hesitant an approach, there was a risk of monetary policy having to be tightened more severely at a later stage, which makes a hawkish rate decision on Thursday likely.”
“There will likely be a deadlock in EUR/USD for now with the euro standing up well against the dollar as long as there is no surprise news on the monetary policy or geopolitical front. At present, the latter seems more likely.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.