Commerzbank lowers its EUR/USD year-end forecast from 1.20 to 1.15


The firm's head of FX and commodity research, Ulrich Leuchtmann, argues that following the ECB meeting yesterday, "our ECB experts conclude that a reduction of the ECB deposit rate by 10 bps (to -0.6%) is likely (among other measures)".

Adding that they now view a "moderate" forecast of 1.15 for EUR/USD this year-end.

Leuchtmann also says that this is "based on optimism that the debate on the ECB's effective lower bound will not be too intense, but anyone who manages EUR/USD risks would do well to be prepared for more severe euro weakness".

Further noting that "instead of a EUR/USD exchange rate of 1.24, we now expect just 1.20 at the end of 2021 and as I said, all these are rather optimistic forecasts".

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