Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, analyzes EUR/USD outlook.

The Fed is only human too

“EUR/USD levels close to the 1.20 mark are not justifiable in my view. Why? I never had the impression that the market really believed the ‘tough guy’ impression chair Powell wanted to impersonate.”

“For some time now the OIS market has been pricing in Fed rate cuts for the medium term which Powell (it seems to me) wanted to dissuade it from. If I am correct with my (admittedly very subjective) view the US currency does not have far to fall, the realization that the Fed is quite human should then not result in enormous USD depreciation. But nor does it result in EUR/USD levels below 1.08 on a sustainable basis either.”