Commerzbank Sees EUR/USD Holding Near 1.15 Amid Fed Hawkish Stance

Commerzbank's Volkmar Baur notes that EUR/USD stabilized after the Federal Reserve's hawkish surprise, which has markets now fully pricing another Fed rate hike in December and no cuts until late next year.

The bank has adjusted its forecast, expecting EUR/USD to hold near 1.15 through year-end before gradually rising, targeting 1.18 by end-2027 as US policy and politics weigh on the Dollar.

According to TMGM Analysis, despite higher policy rates and slightly increased interest rate expectations for the Fed over the next 12 months, long-term interest rates tended to fall yesterday.