EUR/USD depreciated 0.2% to 1.0893 in a single day earlier than tomorrow’s European Central Financial institution assembly, DBS’ FX analyst Philip Wee notes.
EUR priced in ECB charge lower
Following the drop within the Eurozone’s CPI inflation to 1.8% YoY in September, the ECB will seemingly decrease the deposit facility charge by 25 bps to three.25%. Nevertheless, this month’s brief EUR/USD technique dangers operating right into a traditional ‘purchase the hearsay, promote the very fact’ situation.
“This month’s 2.2% depreciation has exceeded all month-to-month losses this 12 months. Since November 2023, the 100-week shifting common (presently round 1.0825) has considerably supported the EUR. Assuming this back-to-back lower materialises, the ECB might not pivot for an additional lower in December amid expectations for 2 Fed cuts in November and December.”
“Eurozone’s core inflation, at 2.7% YoY in September, remained above the ECB’s 2% goal. Financial pessimism additionally eased after the ZEW survey expectations improved to a six-month excessive of 20.1 in October, following three months of declines.”
