German Bank: Euro against Dollar may strengthen as European Central Bank has greater room to address inflation.

The German Commercial Bank stated that in the long run, the Euro may appreciate against the US dollar because the European Central Bank has more room to address higher inflation compared to the Federal Reserve. "In the long term, the key is not how quickly or how much any central bank raises interest rates, but which central bank successfully controls inflation," she pointed out. Given the significant increase in import tariffs, the core inflation rate in the United States is higher than in the euro area. However, pressure from the Trump administration has made it difficult for the Federal Reserve to adequately respond to inflationary pressures.