Commerzbank economists analyze the outlook for the Euro after the ECB gave no surprises to the market on Thursday.
The ECB will have to keep interest rates at high levels for a long time
At the moment, our positive story for the Euro has not been able to develop: that the ECB will have no room to cut rates, that it will therefore have to keep interest rates at high levels for a long time yet and that, therefore , the Euro will appreciate (at least initially).
However, the market still does not believe this story. It’s still too early. For now, the fall in inflationary pressure and the difficulties of the euro zone economy seem to confirm the market’s opinion. You will have to be patient. How much patience? Firstly, the evolution of inflation must seem very disappointing (from the ECB’s point of view); We haven’t gotten to that point yet. And we’re not likely to get to that point next month either. I only wait for the first noticeable effects on Euro exchange rates in the first quarter of 2024.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
