Euro: Hawkish ECB tone could limit downside against US Dollar – Commerzbank

Commerzbank’s Thu Lan Nguyen expects EUR/USD to see limited drivers from United States (US) data or Federal Reserve (Fed) communication this week, putting focus on the European Central Bank (ECB). With markets already pricing a September hike, she argues that how hawkish the ECB sounds on inflation and future tightening will be key for Euro performance and downside risks in EUR/USD.

ECB communication to shape Euro risks
“This week promises to be a quiet one for the EUR-USD exchange rate. As we have discussed here many times before, US monetary policy is currently the key driver of the currency pair. However, on the one hand, Federal Reserve officials do not comment publicly on the monetary policy outlook in the week before the Fed meeting.”