According to Odaily, Commerzbank analysts have indicated that following the European Central Bank’s decision to lower the deposit rate by 25 basis points last week, several other central banks are set to announce their policy decisions this week. Most of these decisions are likely to maintain current interest rates, with one significant exception. If the Federal Reserve does not begin its rate-cutting cycle on Wednesday, it would be a major surprise.
Analyst Volkmar Baur noted, ‘At the start of this week, the market anticipated a slightly higher than 50% chance of a significant rate cut by the Federal Reserve. Our economists still expect a 25 basis point cut, which is well justified.’ He added, ‘However, a small initial step does not rule out larger moves in the future. This is why the current risk leans towards a weaker dollar.’