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Eurozone inflation data has yet to provide the ECB Governing Council doves with any strong arguments to end rate hikes. Economists at Commerzbank therefore expect the euro to remain supported.
Euro unfazed by stubbornly high core inflation
Eurozone inflation data did not provide any fresh impetus to the euro. Even if core inflation did not slow as expected in July, but stood at 5.5%, the result was within the normal margin of error.
Monday’s data certainly did not convince the hawks on the ECB’s board that the rate hike cycle is over.
Our ECB experts still believe that market expectations for another rate hike may be dashed, but there is currently no reason for the market to reconsider this expectation. This provided support for the euro.
