Fed, ECB Response to Energy Price Shock Matters Most for Euro vs Dollar
Dow Jones17:32
0932 GMT - Upcoming policy decisions from the Federal Reserve and European Central Bank will matter more for the euro-dollar exchange rate than oil prices, Commerzbank's Thu Lan Nguyen says in a note. It is less about the oil price shock and more about how the Fed and ECB respond to it, she says. "As long as markets do not expect the Fed to react much more forcefully to the inflationary shock, the dollar will struggle to fully capitalize on the fundamental advantage provided by higher oil prices," she says. The U.S. is a net oil exporter while the eurozone is an energy importer. The euro falls 0.3% to $1.1203. The Fed's decision is on Oct.28 followed by the ECB the next day.
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