Euro Shouldn’t Edge Much Lower, Says CBA Europe’s Haddad

The video discusses the current economic situation in the Eurozone, highlighting that economic activity is likely to fall short of the European Central Bank's (ECB) projections. Despite this, the euro is not expected to decline significantly due to factors like the ECB's easing bias and the Eurozone's favorable balance of payments. The ECB is anticipated to cut interest rates, but its ability to implement aggressive monetary policy is constrained without fiscal support. The Eurozone's large current account surplus and the euro's relative undervaluation are also discussed as factors supporting the euro.

What constraints does the ECB face in implementing more aggressive monetary policy?

What factors are mentioned that could underpin the euro despite the prospect of easing from the ECB?