The euro was able to appreciate during the course of the trading day. In the view of economists at Commerzbank, the recovery is not sustainable.

Doves might sound more cautious again

“Inflation and above all core inflation is likely to remain at high levels thus requiring further aggressive monetary policy tightening. The uncertainty of whether the ECB would be willing to do that is likely to put pressure on the euro over the coming weeks.” 

“If the ECB has to retract its comparatively optimistic economic projections as signs of a recession rise, the doves on the board might sound more cautious again.”

“The recovery in EUR/USD seen over the past days is unlikely to be sustainable. We see the risk of the market being disappointed in its expectations of the ECB with this being reflected in falling EUR levels.”