For exchange rates it is not paramount how much currencies are performing at or near the current moment. What is more decisive is the expected return over the long term, in the opinion of the economists of Commerzbank.
The Fed will again cut its key rate quickly and significantly
“The market expects that, after the rate hike cycle, the Fed will again cut its key rate quickly and significantly. It only expects very moderate rate cuts at the end of the rate hike cycle. As long as this continues, it is Any further Fed rate hike is likely to be seen as a mistake, or at least as less relevant to the USD.”
“The areas below the key rate expectations curves are much more relevant than the positioning of the curve at present or in the near future. For this reason, we expect that a revision of key rate expectations, which occurs simultaneously for the ECB and the Fed, could end up being slightly positive for the euro.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
