EUR/USD: Slowly working its way up again – Commerzbank

The Euro has been slowly moving higher for several weeks now. Economists at Commerzbank analyze EUR/USD outlook.

Euro not weak, just the Dollar is stronger

At the moment, there does not seem to be any momentum for the Euro to weaken. Friday's inflation figures will certainly be crucial, but there is no trend towards a weaker Euro, at least not at the moment. Only the Dollar is simply stronger, which is understandable given the strong figures from the US economy.

Comments from ECB officials may have also had a supportive effect on the EUR. Both ECB President Christine Lagarde and the head of the Bank of Greece, Giannis Stournaras, sounded quite cautious by their respective standards on Monday. Stournaras, of course, argued for a rate cut in June, but since he was the first one who pushed for rate cuts last year, this was not a big surprise.

Stournaras completely ruled out a rate cut in March, and at least to a large extent one in April. Even if a first rate cut is not priced in until June, it is certainly not bad for the Euro if one of the biggest doves on the ECB Governing Council holds similar views. After all, it makes earlier rate cuts much less likely.