#EURUSD @ 0.96911 : No upside potential for the time being – Commerzbank
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EUR/USD points downward in the short-term. The euro should only start to recover when investors increasingly bet on an end to the crisis next year, economists at Commerzbank report.
“The determined tightening of monetary policy and the astonishingly robust US economy make the US dollar the favorite currency of international investors.”
“For the euro, downside risks still dominate for the time being: ECB rate hikes continue to lag those of the Fed. The ECB is perceived as less determined in the fight against inflation. This tends to weigh on the euro. In addition, the energy crisis will remain a burdening factor for the euro in the coming months.”
“For 2023, we expect EUR/USD to rally as the energy crisis is priced out and the euro area growth outlook brightens. In addition, the Fed is likely to cut its interest rates slightly again after all due to the US recession, which would further close the gap between monetary policies.”
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