EUR/USD: Euro likely to benefit from monetary policy decisions – Commerzbank

The central bank meetings that are due next week are apparently already casting a shadow as EUR/USD was able to appreciate yesterday. Economists at Commerzbank analyze the pair’s outlook.

Potential for surprises

Whereas the ECB is expected to implement a further 25 bps rate hike, the US central bank is likely to pause its rate hike cycle. However, the expectations for the US central bank meeting are characterised by higher uncertainty, as there are some market participants who expect a rate hike on Wednesday. 

Depending on how expectations develop over the coming days, we might see more pronounced moves in EUR/USD.

Whereas we principally expect the EUR to find support as a result of the monetary policy decisions, there is larger potential for surprises on the USD side of things.