ECB: Cheap euro is a major challenge - SocGen

In view of Kit Juckes, Research Analyst at Societe Generale, the cheap euro presents a major challenge to the ECB, as it edges towards policy normalisation.

Key quotes

“With the market unconvinced about a much higher terminal Fed Funds rate in the US, there is a risk of a sharp EUR/USD spike should market expectations about ECB tightening rise much further. This would tighten financial conditions in the euro area prematurely. It is a problem shared by other central banks contemplating policy shifts.”