Created
: 2024.10.15
2024.10.15 20:27
Before Thursday's ECB meeting, it is worth taking a brief review of market expectations and EUR/USD. In recent days, interest rate expectations for the Fed and the ECB have partly been revised significantly: By year-end, the market expects the Fed to cut less than 50 basis points in total, while it is much more cautious with regard to the ECB, where it still sees significant cuts at the short end in particular, Commerzbank's FX analyst Antje Praefcke notes.
"If ECB President Christine Lagarde expresses concerns about the economic risks in the euro area on Thursday and the data then confirm these concerns, the market could become even more certain about future interest rate cuts and put the euro under pressure. However, our economists think that the market is generally too pessimistic about the development of key rates in the euro area. They expect significantly fewer cuts."
With regard to our forecast for the Fed funds rate, the market appears to be overly optimistic, as it is pricing in fewer cuts than our forecast. A correction of expectations in the direction of our experts' forecast would suggest losses in the USD. The market would have to correct its expectations for the ECB and Fed and EUR/USD would rise in the foreseeable future."
"All in all, this means to me that the USD could struggle to remain below the 1.09 mark in EUR/USD on its own, but the ECB and Lagarde could potentially pave the way for this on Thursday on the euro side if the market were to step up its interest rate cut expectations for the ECB again."
Created
: 2024.10.15
Last updated
: 2024.10.15
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy