German Bank: Even if the euro rises above 1.20, the European Central Bank should not be too concerned.

German Commerzbank analyst Thu Lan Nguyen said that the Euro to US Dollar exchange rate (EUR/USD) may rise above 1.20, but this may not necessarily be a problem for the European Central Bank. ECB Vice President Luis de Guindos had previously stated that such a level might be tricky. However, as mentioned at the ECB meeting on Thursday, the growth outlook has improved. In this regard, the tolerance for a further strengthening of the Euro may be higher. Commerzbank has raised their year-end forecast for the Euro against the Dollar from 1.20 to 1.22, citing expectations for further rate cuts by the Federal Reserve and erosion of its independence. Nguyen said that the ECB may struggle to deal with a stronger Euro caused by a weaker Dollar.