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At some point, the ECB will only be able to disappoint. Euro bulls should be prepared for this, according to Commerzbank economists.
Key takeaways:
It is evident that many currently hold the view that the ECB has been tougher than the Fed. However, at some point after the ECB's presumed final rate hike in June, this view is likely to disappear. At that point, the ECB can only surprise with a dovish tone.
However, this will take some time, and until then, the euro is likely to remain the favorite as it is supported not only by inflation dynamics but also by monetary policy.
The dollar is also under pressure from additional factors at present, such as uncertainty surrounding the debt ceiling. However, at some point, everything will change. Euro bulls should not lose sight of this and should be prepared for it.
