Back
1 Nov 2013
Flash: Deflation fears put pressure on EUR/USD - Commerzbank
FXstreet.com (Córdoba) - The fall in euro zone inflation below 1% has rekindled speculation of a further ECB rate cut. As noted by Esther Reichelt, analyst at Commerzbank, as a result the ECB meeting gains added significance for EUR/USD.
Key Quotes
"Should speculation of further easing be fuelled further in the press conference, the euro may well depreciate notably".
"Should the ECB consider further measures in support of the economy to be necessary, this would put pressure on the euro. In that case speculative market participants would no doubt reduce the net longs that are still at record levels, which would cause the euro to depreciate even further".
"The events in the euro zone are also likely to overshadow the Bank of England's rate decision which will take place on Thursday as well. In view of the recently strong growth in the UK, sterling is more likely to appreciate further against the euro and dollar".
Key Quotes
"Should speculation of further easing be fuelled further in the press conference, the euro may well depreciate notably".
"Should the ECB consider further measures in support of the economy to be necessary, this would put pressure on the euro. In that case speculative market participants would no doubt reduce the net longs that are still at record levels, which would cause the euro to depreciate even further".
"The events in the euro zone are also likely to overshadow the Bank of England's rate decision which will take place on Thursday as well. In view of the recently strong growth in the UK, sterling is more likely to appreciate further against the euro and dollar".