The encouraging disinflationary process in the Eurozone leaves the ECB room to cut the policy rate again in September, which remains a headwind for the Euro (EUR), BBH analysts say.
ECB to cut policy rate in September
“EUR/USD fell around 0.3% during the European trading session to lows around 1.0860.”
“There was no new policy guidance from ECB Vice President Luis de Guindos. Guindos said ‘in terms of data, September is a much more convenient month for decision-making than July.’ In our view, the encouraging disinflationary process in the Eurozone leaves the ECB scope to cut the policy rate again in September, which remains a headwind for the EUR.”
“The swaps market implies an 80% chance of a 25bp ECB rate cut to 3.50% on September 12. Eurozone consumer confidence index for July is next (10:00 New York)”
Source: Fx Street
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