EUR/USD to see only temporary setbacks as inflation eases on sustainable basis – Commerzbank
|A gap is increasingly emerging between the Fed's outlook and market expectations. A sustained decline of inflation will justify only temporary setbacks in EUR/USD, economists at Commerzbank report.
Dollar caught between market and Fed
“The Fed signalled that it is likely to adjust its rate outlook (the dots) to the upside at next week’s meeting and seemed anxious to invalidate market expectations for rate cuts next year.”
“The discrepancy between Fed and market expectations might widen further though, which also results in the potential for a temporary Dollar rally if new information were to cause the market to align itself more with the Fed’s outlook.”
“As we assume that inflation will now ease significantly and on a sustainable basis this is likely to justify only temporary setbacks in EUR/USD.”
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.