What are we to expect from the European Central Bank (ECB) meeting today? In the view of economists at Commerzbank, comments on future rate developments become important. They expect the EUR/USD pair to hover around the 1.07 zone following the announcement.
ECB to paint a similar picture that it has already laid out
“If any doubts arise about whether the market is too optimism about the ECB, for example, because the ECB puts too much emphasis on the downside risks for the economy as a result of a possible energy crisis this might cause some investors, who have come to expect a relatively tight interest rate cycle, to become more and sell the euro.”
“If the ECB seems optimism that the key rate will rise even beyond September so as to counterbalance price risks this is likely to further fuel the euro, as it would cement the ‘turning point’ in ECB monetary policy.”
“I could imagine that the ECB will paint a similar picture that it has already laid out in numerous statements and blog contributions and that we will not see any major surprises in one direction or the other – also as regards the longer-term interest rates in the peripheral countries.”
“I can imagine that EUR/USD will settle back into the 1.07 area in the end, following some initial hectic fluctuations this afternoon.”
See – ECB Preview: Forecasts from eight major banks, ready for lift-off