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Fed and ECB to go separate ways - Commerzbank

FXStreet (Córdoba) - The Commerzbank Economic Research Team notes that many investors are under-estimating monetary policy divergence between the US and the Eurozone.

Key Quotes

“While the Fed can be expected to raise interest rates in response to the robust US economy, the ECB will counter painfully slow euro zone growth with broad-based government bond purchases (QE), thus cementing its zero interest policy”.

“Many investors are under-estimating this divergence. The euro will probably lose far more ground to the dollar than most are expecting”.

“German equities should do much better next year than their US counterparts, especially since Germany will be emerging from its economic doldrums”.

“The main risk is still a further downturn in the emerging markets. On average, crude oil is likely to trade below $85”.

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