EUR/USD is trading around 1.09. In the opinion of Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, it is still much too early to become EUR sceptical.

ECB comments seem successful

“As long as the ECB gives the impression that it is fighting inflation and as long as the market can assume that these efforts might be successful, the Euro will not suffer. In that case, one could even come up with a EUR-positive argument.”

“The FX market does not seem to mind so much whether we really will see only 25 bps in March as it minds whether the ECB is already committing to that. Because the latter would point to reduced sensitivity. That would be damaging for EUR. The purpose of the ECB comments is likely to be to dispel this impression. And they seem successful to me.”

“At the moment the disillusionment of the market, which we expect to see at some point, is still a long, long way away. And that is why it is still much too early to become EUR sceptical.”