US and EU: Inflation divergence is narrowing - CIBC
|Andrew Grantham, an analyst at CIBC, points out that inflation rates in the US and the Eurozone are converging and he explained that could lead to the ECB normalizing interest rates before year-end, a positive factor for EUR/USD.
Key Quotes:
“The divergence between key core inflation measures in the EZ and US has narrowed slightly from previous extremes, thanks to a modest easing stateside and marginal pick up in Europe.”
“That should also mean that the divergence in monetary policy can come down from extremes. After the one Fed hike that we expect this year, the US will go on hold and before year-end the ECB could have started slowly normalizing interest rates. That will provide the next significant leg higher for the euro against the greenback.”
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.