Dollar Faces Bigger Hit Than Euro if Fed, ECB Resume Rate Cuts -- Market Talk

Dow Jones05-29 17:20

0920 GMT - The euro is likely to rise against the dollar even if the Federal Reserve and European Central Bank both resume cutting interest rates next year, Commerzbank's Thu Lan Nguyen says in a note. The dollar would probably be more adversely affected than the euro by rate cuts if the Iran war ends, she says. "The reason is that monetary easing in the U.S. is likely to occur under political pressure from the White House, and at a time when U.S. core inflation remains above the 2% target." This would fuel concerns about the erosion of Fed independence, she says. Commerzbank expects the euro to rise to $1.21 by the end of 2027, from $1.1636 currently. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

May 29, 2026 05:20 ET (09:20 GMT)

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