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6 Feb 2013
Forex Flash: Euro higher and another cut in interest rates ahead from ECB - ANZ
With EUR/USD last at 1.3582 just one day ahead of next ECB meeting, “overall monetary conditions are something that the ECB will be watching,” ANZ's Research Team says, adding: “If the exchange rate were to appreciate sustainably from here at a time when the economy remains substantially sub-trend, then that could become an argument for the ECB to cut interest rates,” the analysts suggest.
“The shift higher in longer term interest rates could also contribute to such a decision. We anticipate further EUR appreciation in the months ahead and another cut in interest rates from the ECB,” they conclude.