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ECB should pressure EU/USD lower - RBS

FXStreet (Guatemala) - Analysts at RBS explained that the ECB meets this week amid a further decline in medium-term inflation expectations.

Key Quotes:

“We do not expect the ECB to change policy rates, but we do anticipate a clear signal that the likelihood of sovereign asset purchases has increased”.

“The flash estimate for September inflation is released in the Euro-area tomorrow, and the upside surprise in German inflation (+0.8% y/y vs. consensus +0.7% on an EU harmonized basis) suggests that there may be risks to the upside for the Euro-area composite tomorrow”.

“While on the margin a positive for EUR, focus should stay on stagnant growth and falling medium-term inflation expectations. On the growth front, German unemployment statistics are released. EUR/USD downside preferred through the ECB meeting”.

Hint of currency war in the air - Commerzbank

Weakening their own currency appears to be en vogue with central banks at present and for those who actually try to do so, the currency market is delivering the desired effect, , said Ulrich Leuchtmann, analyst at Commerzbank. According to the analyst, whether we will see more of this trend will also depend on the Fed’s reaction.
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