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Forex Flash: ECB rate cut to be fatal for the EUR/USD - Commerzbank

Commerzbank analyst Ulrich Leuchtmann points out that IMF Lagarde's statement (about existence of room for another ECB rate cut) at the G20 meeting was overlooked. "After all it has not reached zero yet", he wrote, questioning why would she be interested in the ECB key rate? "Perhaps I am getting paranoid following three years of ECB crisis management and see signs for an ECB rate cut in anything. Certainly Largarde’s comments were not suited to reassure me", he added.

About ECB Draghi's position on exchange rates, saying they're not a direct political target but would of course influence growth and inflation projections, Leuchtmann believes he was signalling that the stronger EUR/USD was a reason for more pessimistic ECB projections which might be used as an excuse for a rate cut. "Everyone is reassuring me that my concerns are unfounded. It is probably merely due to the fact that after the experience of the past 3 years nothing would surprise me when it comes to the ECB", he explained, concerned and pointing to a rate cut as fatal for the EUR/USD.

Nicos Anastasiades winner of first round of elections in Cyprus

Debt stricken Cyprus held the first round of presidential elections on Sunday in which pro-bailout candidate Nicos Anastasiades secured over 45% of votes, while two anti-bailout candidates Stavros Malas and George Lillikas saw a 26.9% and 24.9% support, respectively.
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Fundamental Morning Wrap: EUR Silvio worries, Abe & JPY continue and GBP under pressure

With a quiet week ahead we have taken a look at the morning institutional research and note that the focus appears to have fallen on a cluster of themes; Europe has its eyes on the Italian election, the G7 & 20 have had little effect on Japanese attitudes towards monetary policy, and downside pressure is building up against GBP.
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