According to Ned Rumpeltin, European head of FX strategy at TD Securities, the highlight of the week will be Thursday’s ECB meeting and they are looking for the Governing Council to pivot to an explicit easing posture.
Key Quotes
“A change to their forward guidance at this round should cement expectations for a 10bps rate cut to come in September. This looks fully baked into the cake, however, with about 13 bps priced in for that meeting. This suggests the ECB would have to over-deliver this week to avoid disappointing those who are hoping for more -a risk we cannot dismiss.”
“While our base case leaves us biased to look for some small upside as a result, we think EURUSD is likely to remain choppy through the event. We think recent ranges should continue to hold as key thresholds at 1.1107 and 1.1412 are fairly far away at this stage.”
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