EUR / USD PRICE OUTLOOK: EURO LOOKS FORWARD TO REVIEW STRATEGY FOLLOWING ECB DECISION
The EUR / USD exchange rate was pushed higher on Wednesday. The main currency pair likely to benefit from a wide range US dollar weakness due to the disappearance of bad concerns and an improvement in market sentiment. EUR / JPY also hit the ground, but the euro fell lower against most other FX peers, where traders focused on the risk of events posed by this week’s meeting of the European Central Bank.
The ECB’s interest rate decision will cross the wires on Thursday, 22 July at 11.45 GMT. ECB President Christine Lagarde is expected to resume the press conference shortly thereafter at 12:30 GMT. The risk of events triggered by the ECB meeting following the recent review of the monetary policy strategy is in line with the relatively high example of expected overnight volatility in EUR / USD.
In fact, EUR / USD is expected to be 7.9% overnight among the top 86th percentile of measurements made during the last 12 months and exceeds the 20-day average by 5.4%. This refers to the expected EUR / USD trading range of 98 points. In fairness, this appears to have been relatively dampened by the central bank’s decision to lower interest rates, together with the updated economic forecasts.
EUR / USD PRICE CARD: DAILY SCHEDULE (March 1 to July 21, 2021)
This may be due to the fact that no real change in ECB policy is expected on Thursday. As such, traders are likely to pay close attention to the statement and further guidance provided by ECB President Christine Lagarde. To this end, the ECB’s Strategic Review provided detailed guidance on how the central bank views inflation. More specifically, the ECB wants inflation to average 2% in the long run, which leaves more room for maneuver to overcome inflation.
The details of the quality control packages put in place by the European Central Bank, which together act as a tool to achieve the inflation mandate, see increased scrutiny in the light of tomorrow’s announcement. It focuses on possible adjustments that could be made to the ECB’s firm purchase program announced in 2014 or to the pandemic emergency purchase program (PEPP), which is due to end in March 2022.
Although there may be some disagreement within the Governing Council on whether or not to increase accommodation, the risks to economic activity posed by the delta covid option may be collectively cautious and patient. By the end of the day, the impact on the EUR / USD is likely to depend on a balancing act between strengthening the credibility of the ECB and increasing growth prospects, so DailyFX real-time news page For the ECB’s direct interest rate program and press conference.
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