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EUR/USD will continue to weaken but the decline will be slow - Commerzbank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 13, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Córdoba) - The EUR/USD downtrend will continue, as the monetary policies of the Fed and the ECB diverge further, but according to Antje Praefcke, analyst at Commerzbank, with next week’s US economic data likely to be mixed, EUR/USD will weaken only gradually.

    Key Quotes

    “By now, the markets are aware of the fact that the Fed and the ECB are pursuing different monetary policy paths. While a first Fed rate hike in December seems to be a certainty, the ECB is increasingly hinting at an even more expansionary course”.

    “EUR/USD will therefore continue to trend downwards. However, the markets have largely priced in the Fed lift-off and the US data are unlikely to trigger unlimited dollar euphoria”.

    “While private consumption in the US is booming, the manufacturing sector is not yet out of the woods. Industrial output figures look set to be on the weak side. In contrast, US consumer price data for October will probably signal a gradual pick-up in US inflation and support the Fed’s view”.

    “With US data mixed, the downtrend in EUR/USD will continue, but the exchange rate will be volatile and the decline will be slow. Market participants will be able to benefit from better entry levels for USD longs”.
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