Economists at Commerzbank have updated their Euro forecast after the last European Central Bank (ECB) meeting.
First ECB rate cut expected in the summer
We expect the first ECB rate cut in the summer (June) and a total of 75 bps in 2024 and 25bps more in 2025. This is not much less than the market is pricing in – a total of 200 bps, but it is still enough to have a visible positive impact on EUR/USD.
With our ECB forecast, we still expect EUR-positive surprises. As a result, our previous price target for EUR/USD (1.12) looks more likely and even slightly under-ambitious. We are therefore moderately raising our EUR/USD price target to 1.15.
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