Commerzbank: If the European Central Bank maintains a cautious stance, the euro could fall towards $1.10

(1) Commerzbank analyst Antje Praefcke stated in a report that if the European Central Bank maintains interest rates unchanged when announcing its rate decision and issues cautious signals regarding possible future rate hikes, the euro may decline further. (2) She noted that given France's fiscal challenges, the European Central Bank is unlikely to deliver a strong tightening policy signal. (3) She pointed out that the market still believes there is a possibility of the European Central Bank raising rates once more before mid-next year, and possibly twice before the end of 2027. (4) Praefcke stated that if the European Central Bank's cautious stance prompts the market to lower its expectations for future interest rates, the euro may fall toward 1.10 US dollars.