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18 Feb 2013
Forex Flash: ECB rate cut to be fatal for the EUR/USD - Commerzbank
Commerzbank analyst Ulrich Leuchtmann points out that IMF Lagarde's statement (about existence of room for another ECB rate cut) at the G20 meeting was overlooked. "After all it has not reached zero yet", he wrote, questioning why would she be interested in the ECB key rate? "Perhaps I am getting paranoid following three years of ECB crisis management and see signs for an ECB rate cut in anything. Certainly Largarde’s comments were not suited to reassure me", he added.
About ECB Draghi's position on exchange rates, saying they're not a direct political target but would of course influence growth and inflation projections, Leuchtmann believes he was signalling that the stronger EUR/USD was a reason for more pessimistic ECB projections which might be used as an excuse for a rate cut. "Everyone is reassuring me that my concerns are unfounded. It is probably merely due to the fact that after the experience of the past 3 years nothing would surprise me when it comes to the ECB", he explained, concerned and pointing to a rate cut as fatal for the EUR/USD.
About ECB Draghi's position on exchange rates, saying they're not a direct political target but would of course influence growth and inflation projections, Leuchtmann believes he was signalling that the stronger EUR/USD was a reason for more pessimistic ECB projections which might be used as an excuse for a rate cut. "Everyone is reassuring me that my concerns are unfounded. It is probably merely due to the fact that after the experience of the past 3 years nothing would surprise me when it comes to the ECB", he explained, concerned and pointing to a rate cut as fatal for the EUR/USD.