Euro worries increase chance of rate cut

The euro is back in the spotlight this week, with the likes of ECB chief economist Philip Lane worrying (too much in our in view) about the impact of its recent appreciation on the inflation outlook. If the US Fed chooses to loosen policy at its meeting next week, the pressure on the ECB to follow suit will mount. But for now we are sticking to our forecast for interest rates to be unchanged over our forecast horizon.