On April 11, Dowding, chief investment officer of Royal Bank of Canada BlueBay Asset Management, said that the European inflation rate may remain above 4% for some time to come. Possibly the first rate cut.
In the interim, euro zone rates are expected to likely peak around 3.75%, meaning the euro zone is now at a point in the rate hike cycle where the ECB remains more likely than the Fed to tighten monetary policy.
Relatively speaking, the euro has room to strengthen, as banking risk is unlikely to be as long-lasting an issue in the euro zone as it is in the US.