EUR/USD holds above 1.1630 with rallies capped below Wednesday’s ~1.1654 highs ahead of the ECB. Deposit hike consensus 2.50% from 2.25%; Germany final HICP in line.
The Euro edged higher against the US Dollar on Thursday but stayed capped below Wednesday’s highs ahead of the ECB decision.
EUR/USD holds above 1.1630 with rallies capped below Wednesday’s highs at 1.1654 / the 1.1650 area so far. Risk-off sentiment amid high oil prices and surging global yields is likely to keep rallies subdued.
The ECB is widely expected to hike for the second time this year, bringing the deposit facility rate to 2.5% from 2.25%; the main focus is President Lagarde’s press conference. Germany’s final HICP confirmed preliminary figures — 0.2% month-on-month and 2.9% year-over-year in August (from 0.9% and 2.8% in July), in line; impact on the Euro marginal.
The Dollar sits on its back foot — debasement trade, disappointment over the Treasury bond buyback program, USD/JPY carry-trade unwinding, and concerns about US government debt. Soft prior Treasury enlarged buyback and GBP/USD ~1.3555.
Also see: ECB Hikes by 25 bps as Expected; Main Refi to 2.65%.
Also see: EUR/USD Weakens Near 1.1604 Despite ECB Hike as US PPI Prints Hot.
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