As traders and investors eagerly anticipate the European Central Bank (ECB’s) upcoming monetary policies review, the euro fluctuates around $1.088.
Market uncertainty is reflected in the recent decline of the currency from its highs set four months ago, $1.094.
Expected rate cuts by the ECB
Trading Economics data suggests that the ECB may cut rates twice more before the year’s end, possibly beginning as soon as September.
Vice-President Luis de Guindos stressed the importance of the new macroeconomic projections to be released in September for the Bank’s policies.
Recent actions of the ECB and its future plans
Last week, the ECB maintained interest rates in line with expectations on the market. The ECB’s President Christine Lagarde said that it is still open to make a decision about the September monetary policy adjustment. It will depend on economic forecasts and data.
The ECB is committed to making data-driven, informed decisions in the face of changing economic conditions.
Coming soon: Data release
Traders, analysts, and economists are anxiously awaiting the flash Purchasing Managers’ Index data (PMI), for July, in the Eurozone. Germany and France, this week.
These data provide important insights on the health and performance economics of these key areas, providing guidance to market participants in navigating euro’s current fluctuations.
The market sentiment and the future outlook
Recent weakness in the euro from its highs reflects underlying anxiety on the part of traders as they speculate about ECB next steps.
The ECB has a flexible strategy that adapts to the economic indicators.
Market sentiment will be heavily influenced by the upcoming PMI figures, as well as expectations about euro’s future trajectory.
Key Economic Indicators
These flash PMIs will be a good barometer of economic activity in the Eurozone and Germany.
A stronger-than-expected PMI reading could bolster the euro, while weaker data may reinforce expectations of further monetary easing by the ECB.
The market is focused on the upcoming ECB policy review as well as the release of important economic data.
In the months to come, the central bank will be able to determine the direction of the euro by guiding its decisions with new economic forecasts. These developments are important for traders and investors to stay on top of to avoid volatility.
The post Euro hovers around $1.088, as ECB prepares policy review could be updated as new developments unfold.
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