Euro could stay rangebound against US Dollar on ECB guidance – DBS

The European Central Bank’s 2% inflation target is expected to take priority as France’s rating affirmation provides breathing space, according to Philip Wee at DBS Group Research. He anticipates that the ECB will leave its deposit rate on hold while indicating that a December increase remains possible. A balanced message from Christine Lagarde is expected to help keep EUR/USD within its recent 1.11–1.13 range.

ECB policy outlook keeps Euro range-bound

"Today, the European Central Bank is likely to leave its deposit facility rate unchanged at 2.50%, while keeping the door open for a December hike."

"The ECB is likely to seize the breathing space afforded by Moody’s affirmation of France’s Aa3 sovereign debt rating to prioritise the return of inflation to its 2% target."

"ECB President Christine Lagarde will need to reinforce the ECB’s inflation-fighting credentials without appearing complacent about France’s fiscal vulnerabilities."

"A balanced message should help stabilize EUR/USD within this month’s 1.11-1.13 trading range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)