The economists of Societe Generale analyze the prospects of EUR/USD ahead of a monumental week for monetary policy decisions.
ECB statement and press conference will guide another 25 basis points in July
The ECB seems like a simpler affair compared to the Fed. Our view (and the general view) is a 25 basis point increase in all rates, which would reduce the spread against Fed funds to 175 basis points. In theory, this would bode well for EUR/USD higher.
The ECB statement and press conference are likely to point towards another 25 basis points in July. September is much closer, but the ECB will be tight-lipped about what happens after August and will have three more CPI releases when it meets again after the summer break.
The more pessimistic Credit Conditions Survey and household optimism about moderating inflation could dampen the ECB’s hawkish message and frustrate EUR/USD bulls.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
