ECB hawkishness underlines support for Euro – CIBC

Economists at CIBC Capital Markets expect further ECB activism and a building recovery story to maintain a constructive medium-run EUR outlook.

Looking for a 3.50% ECB terminal rate

“The presumption of price pressures remaining elevated amidst an improved macro backdrop leaves us comfortable in terms of looking for a 3.50% ECB terminal rate.”

“While the market may have overreacted in terms of recent implied policy presumptions, we expect further ECB activism and/or a building recovery story to maintain a constructive medium-run EUR outlook.”

“Q2 2023: 1.10 | Q3 2023: 1.11 (EUR/USD)”