The EUR/USD bounced 1% during the night, but remains below the maximum of 1,1473 last Friday. The ECB is expected to cut the rates at 25 basic points to 2.25%, and it is anticipated that the president Lagarde indicates the strength of the euro and the US tariffs as key disinflationary risks, says the DBS FX strategist, Philip We.
Lagarde will probably indicate the strength of EUR as an uninflationary risk
“Looking beyond its 1% rebound during the night, the EUR/USD continues within its three -day range between 1,1260 and 1,1430, and below the maximum intra -diameter of 1,1473 last Friday.”
“Apart from the fact that the European Central Bank cut its deposit rate at 25 basic points to 2.25% today, we expect some concern of the president of the ECB, Christine Lagarde, with respect to the recent appreciation of the EUR as a factor that maintains low inflation and adds to winds against raised by US tariffs.”
“The ECB survey on professional forecasts that accompanies it should also reflect degraded growth expectations, stating that defense and infrastructure expense under the ‘Europe’ Rearm ‘plan would not compensate the winds against immediate due to the negative impact of US tariffs”
Source: Fx Street
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