All eyes will be on the ECB today. The EUR/USD outlook is examined by ING economists before the Monetary Policy Decision.

Hawkish ECB, but will we hear more about QT?

Assuming the ECB does maintain market expectations that the deposit rate (now 3.50%) will be close to 4.00% by the end of the year, what else could we see?

One fascinating possibility is that the Hawks will be granted something on quantitative tightening in exchange for holding off on future rate hikes. Reinvestments in the APP scheme were terminated last month. Reinvestment in PEPPs is expected to continue through the end of 2024.

Could PEPP reinvestments be reduced in length, or could the discussion shift to outright asset sales, which could upset both peripheral government bond markets and European credit markets? The market reaction may be complicated, but the EUR/CHF is likely to remain under pressure if this occurs.

We do not have a strong conviction call on EUR/USD today but would say 1.1150 looks good intra-day resistance and 1.1000/1020 is now the lower end of the near-term trading range.

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