Commerzbank cuts its EUR/USD forecast as US labor figures could revive Fed tightening expectations by 44 basis points.
EUR/USD has risen as markets priced out 44 basis points of Federal Reserve rate hikes by year-end, now expecting only 33. The shift follows the Fed’s lack of forward guidance, though this does not rule out future tightening.
Commerzbank reduced its EUR/USD forecast by two cents across all timeframes, citing rising perceived risks of a stronger USD. The bank’s economists expect today’s US jobs report to show 100,000 new jobs, above the Bloomberg consensus of 80,000.
A stronger-than-expected report could shift market expectations back toward tighter Fed policy, pressuring the EUR. Revisions to prior months’ data and the unemployment rate will also influence the USD’s reaction.