You will short the EUR ... and you will be happy - WEFThe ECB is (once again) on the wrong track:
It is stubbornly sticking to its hawkish view and justifying this with the fact that inflation in the euro area will remain stubbornly "sticky" and will probably not reach the target range of 2% until 2025.
The ECB is wrong (once again), as inflation will hover around 3% as early as December 2023 and reach the 2% target mark in the first half of 2024 at the latest (bullseye!).
The hawks of the ECB are thus adorning themselves with borrowed plumes and will soon (have to) reveal their dovish face.
However, since the strong negative disinflation effects will only take full effect from September onwards and core inflation will definitely remain stable in July and August, the ECB will not abandon its planned interest rate hike in July and the European Central Bank could (unfortunately) also be expected to implement a final rate hike in September.
However, these would not be necessary; on the contrary, they will weigh heavily on the already struggling eurozone economy and force the ECB to revise its GDP growth forecasts downwards soon.
-> Germany is a cautionary, recessionary example here!
-> All these points (stronger than expected falling inflation + ailing economy) will hurt the euro, which makes me see a promising short opportunity in the EURCAD.
I have given a detailed insight into the strength of the Canadian economy in my CADCHF trade idea.
Translated with www.DeepL.com (free version)
