Euro / Dollar Rate’s ECB Handicap Could Grow Heavier

  • EUR/USD steadies after retreat back below 1.14
  • But ECB-Fed divergence set to grow heavier still
  • Rising inflation risks could see ECB move faster
  • But EZ vulnerabilities could see it weigh on EUR

ECB President Christine Lagarde. Image: Andreas Reeg/ECB.

For the Euro to Dollar exchange rate the gulf between central banks on each side of the Atlantic is set to become a more daunting headwind that could all but rule out any prospect of a recovery in the months ahead.

Europe’s single currency edged higher on Friday as a nascent slide in global stock markets extended and some commodity prices came under pressure, although it was still set to end the week lower against many major counterparts including the Dollar.

While risk aversion in global markets helped the Euro advance tepidly against many peers on Friday, it had previously lagged behind all but the Swedish Krona and was unable to capitalise from earlier declines in the U.S. Dollar exchange…

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