Tomorrow the inflation figures for the eurozone in June will be published. The European Central Bank (ECB) could leave the euro under downward pressure – also weighing on gold – if it sticks to just 25 basis points (bps) higher at its next meeting, strategists at Commerzbank.
The ECB risks falling behind other central banks
“We will be interested to see if the ECB reconsiders its stance if the rate of inflation turns out to be higher than expected and if it will, after all, consider raising interest rates by more than 25 basis points at its next meeting on 21st June. July”.
“With just a 25 basis point rate hike, the ECB risks falling even further behind other central banks that have already raised interest rates considerably. In this case, the euro would presumably remain weak, which would weigh even more on the price of gold.”
Source: Fx Street
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