At Thursday’s meeting, the European Central Bank (ECB) will likely keep interest rates unchanged, but ECB President Christine Lagarde could make a comment that causes volatility in EUR/USD, FX analysts at CommerzbankUlrich Leuchtmann and Michael Pfister.
Lagarde’s comments may cause volatility in EUR/USD
“Interest rates are likely to remain unchanged. A major change in the overall outlook is also unlikely. After the ECB committed to a rate cut ahead of the June meeting and then had no choice but to follow through in the face of higher inflation rates, it will probably want to avoid making too clear a commitment this time.”
“Accordingly, one might expect the meeting to be fairly unspectacular. However, the jump in implied volatility is larger than in June. This is probably simply because everything was a foregone conclusion before the June meeting. The market probably knew that not much more than a rate cut would be announced. Today is different.”
“After all, There is always the possibility that ECB President Christine Lagarde makes a comment that causes volatility in EUR/USD, for example, regarding a possible rate cut in September.which our economists expect. So today could be more exciting than June.”
Source: Fx Street
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