Despite dovish ECB rhetoric, actual monetary policy conditions are still tightening within the Euro area as
excess liquidity is withdrawn which is preventing any significant Euro selling for now.
The dollar’s vulnerabilities were generally perceived as the greater market threat during Wednesday.
The situation will, however, need to be watched very closely as the Euro-zone economy will be vulnerable to fresh deterioration as policy tightens.
In this context, there will also be the risk of growing political tensions.
The dollar’s vulnerabilities were generally perceived as the greater market threat during Wednesday.
The situation will, however, need to be watched very closely as the Euro-zone economy will be vulnerable to fresh deterioration as policy tightens.
In this context, there will also be the risk of growing political tensions.
The ECB will need to take this threat very seriously and overall risk premiums are liable to increase.
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