 |
| Commerzbank Economists Predict Slow Appreciation for Euro Following ECB Decision |
Commerzbank economists predict that the Euro will only appreciate slowly in the future, following the ECB's decision. Despite the decision not leading to Euro strength, the economists anticipate seeing higher EUR/USD levels. The market's concern is that the ECB may not be aware of the risks that come with rapid rate hikes, which could result in a hard landing of the financial system and the real economy. This concern is unlikely to be overcome quickly, but with time, the market distortions of the past few days are expected to fade away.
As a result, the Euro is expected to appreciate slowly, and it may not return to its old strength soon. The market's concerns have overshadowed the immediate carry a EUR position benefits from the decision. While the economists are optimistic about seeing higher EUR/USD levels in the future, the appreciation of the Euro will be gradual. Investors are advised to remain patient and cautious as the Euro regains its strength slowly.
