EUR/USD might remain under depreciation pressure

Economists at Commerzbank analyze how the “higher for longer” interest rate theme is convincing markets to boost the Dollar.

USD strength might turn out to be excessive

At the moment the central bankers’ ‘higher for longer’ is mainly supported by data in the US, which means that the Fed’s statements seem more convincing. It can be assumed though that the restrictive monetary policy will have an effect on the US economy, with the economy cooling further. Whether the ‘higher for longer’ will then still convince is obviously questionable and the USD strength might turn out to be excessive.

Of course, it remains to be seen when the data might cause doubts amongst market participants. US consumer confidence due for publication today is not likely to cause that as it should continue to point to solid consumption. The data due for publication over the rest of the week is unlikely to provide much new (negative) information either.

Consumer price data from the Eurozone, due for publication at the end of the week, on the other hand, might point towards easing price pressure. That means EUR/USD might remain under depreciation pressure for now.

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.