Battle between EUR and USD is far from decided – Commerzbank
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The Euro was able to appreciate against the Dollar last week and extend its gain yesterday. The current data heavyweight, the US labour market report, is due for publication on Friday. The duel is far from decided, according to economists at Commerzbank.
“Many market participants will still be apprehensive following the Dollar’s strong upside move four weeks ago after the surprisingly positive NFP for January. As a result, they will probably be cautious about taking a too strong position against the USD over the course of the week.”
“If it becomes evident that the labour market is not showing any signs of weakening at all despite the massive rate hikes in the past, the market is going to rely more heavily on further Fed rate hikes and interest rates remaining at these levels for longer. That would be positive for USD.”
“Next week focus is likely to be back on the Euro, as the ECB meeting too might provide some surprises after the inflation data in the Eurozone surprised on the upside. After that it is back to the USD though as the FOMC meeting will be held during the following week. That means, the battle between EUR and USD is far from decided.”
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