Euro Gains Limited from ECB Tightening, Commerzbank Analyst Warns

Commerzbank's Thu Lan Nguyen says that EUR/USD exchange rate remains largely driven by the US Dollar, while Euro-side developments only amplify or dampen trends.

The Euro has gained little from past and expected ECB rate hikes as markets view them as necessary to correct an overly low policy rate and preserve the Euro's value rather than boost it significantly.

Nguyen explains that ECB hikes are seen as a measure of preserving the Euro's value, not increasing its value. This is because investors believe the previous policy rate was too low.