EUR/USD: Euro to suffer on a temporary abandonment of the ECB’s fight against inflation – Commerzbank

We witnessed renewed nervousness above all in Europe – the Euro came under pressure. Nervousness is damaging for the EUR, Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, reports.

Renewed nervousness

“If the stress really were to reach levels which would make a continuation of the ECB’s interest rate policy impossible (let me repeat: that is not our house view!) the ECB above all would have to backpaddle very hard. As it would have been moving more forcefully in the wrong direction and for longer.”

“Even if nobody considers that to be a particularly likely scenario, it makes sense that the European single currency suffers if this risk is considered to be marginally higher.”