26 July 2018 ( Lagos ) : Today’s main event risk for the Euro will be the European Central Bank monetary policy decision, which is widely expected to conclude with interest rates left unchanged at 0.00%.
Although July’s meeting will not include fresh economic projections, investors should not be quick to expect the meeting to be a snoozer. Much of the attention will be directed towards Mario Draghi’s press conference for further insight into rate hike timings and thoughts on global trade developments.
With the ECB already unveiling its tapering blueprint and stating that interest rates would remain at ultra-low levels, "at least through the summer of 2019", Draghi may simply reiterate the message of June’s policy meeting. While economic data from Europe remains positive with inflation hitting the golden 2% level, global trade tensions continue to weigh on sentiment.
Will Draghi be able to maintain a positive stance on the Eurozone economy without causing the Euro to appreciate aggressively? Alternatively, the Euro could take a hit if he decides to strike a cautious tone by focusing purely on global trade tensions and reiterate how interest rates will remain unchanged until Summer 2019.
Regarding the technical picture, the EURUSD continues to find comfort within a wide range on the daily charts. However, the breakout above 1.1700 could encourage an incline towards 1.1768 and 1.1790, respectively.
Source: Lukman Otunuga, Research Analyst at FXTM
Reporting for EasyKobo on Thursday, 26 July 2018 in Lagos, Nigeria
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