Today at 13:45, we will learn the European Central Bank's decision on interest rates and the asset purchase program.
In March, the ECB unexpectedly accelerated its asset purchase schedule for the coming months and announced that the APP could end in the third quarter of this year if the medium-term inflation outlook does not weaken.
Since the March meeting, inflationary pressures still appear to be mounting, the war in Ukraine is far from over, and sanctions imposed on Russia, including a potential ban on trade in energy commodities, could continue to put pressure on prices and slow the recovery.
A hike? Not yet this time
Despite this, the ECB is expected to leave interest rates at record lows today but adopt a more hawkish tone than last time. This could have implications for the EUR/USD exchange rate. EUR/USD appears to have risen above the 1.0900 level ahead of the decision announcement.
The Bank is also likely to maintain its commitment to a faster withdrawal of monetary stimulus and eventually set a clear timetable for the end of QE, while reiterating that interest rate hikes will not occur until the end of the asset purchase program (APP).
According to Reuters, markets now assume an ECB deposit rate hike this year by a total of 70 basis points.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
