Deutsche Bank: ECB intervention not likely to derail euro strength

In a note to its clients, Deutsche Bank's strategist George Saravelos speaks about next week's ECB meeting

"Any verbal intervention against euro strength at next week's ECB meeting may not be a game changer for the common currency", says Saravelos.

He also notes that "investors are already expecting some kind of verbal intervention", further noting that "for any intervention to be credible, the ECB will need to drop any plans to announce a tapering of its QE program in October".

The note also stated that Deutsche Bank's economists see that only if EURUSD touches above 1.2500 is where the tapering announcement would have to be abandoned.

It also says that monetary policy is not the main driver of EUR appreciation but it is because the market is more structurally optimistic on Europe vs the US, and that is something the ECB may not be able to do much about.