EURUSD, European Central Bank (ECB) - Talking Points
- EURUSD[1] rally stalls short of 1.02 amid USD[2] weakness
- ECB slated for first rate hike in 11 years on Thursday
- EU inflation data set to release Tuesday morning
EURUSD continued to push higher on Monday as traders brace for an action packed week. Having entered the blackout period for the FOMC[3], catalysts for EURUSD now shift to Europe. This week sees inflation and consumer confidence data come out, as well as the long-awaited July ECB policy meeting. Traders will also need to pay attention to the Nord Stream 1 pipeline this week, with flows set to resume following the completion of maintenance work. Should flows from Russia diminish or even cease, Euro[4] weakness could return in a swift manner.
Tuesday sees June inflation data for the Eurozone drop, with headline expected to come in at 8.6%. Core inflation however, is forecasted to decline from May with a print of 3.7% expected. Declining core inflation would paint a similar picture to that of the United States, where inflation remains driven by soaring energy and food prices. A hot print on Tuesday may do little to deter the ECB from a 25 basis point rate hike, as Christine Lagarde and company balance inflationary pressures with growth concerns.
EU Economic Calendar
Courtesy of the DailyFX Economic Calendar[5]
As mentioned, the ECB is widely expected to raise rates by 25 basis points at the July meeting, the central bank’s first rate hike in 11 years. The camp in Frankfurt appears split, with some members of the ECB’s Governing Council dissenting publicly by calling for more aggressive rate hikes. President Christine Lagarde has remained adamant that the ECB move at a gradual pace, in
