Euro Gets a Boost from ECB's Inflation Forecasts

EUR:

EUR:

High ECB inflation forecasts provide a little support The euro received a little support overnight on a Reuters report that the new European Central Bank staff projections being released tomorrow would forecast CPI above 3% next year, compared to expectations of 2.7%. The implication here is that, based on these forecasts, the ECB would likely be more hawkish and supportive of the euro. As we discuss in our ECB cheat sheet, there are many moving parts to tomorrow's meeting. However, the biggest part should be a 25bp rate hike – which is only 54% priced – and a factor that should see EUR/USD hold support down at 1.0700.

Chris Turner

ING Economics

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Topics

cpi euro ecb eur/usd monetary policy interest rates central bank economic outlook eurozone economy ecb meeting inflation forecasts currency markets

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