Yesterday’s European Central Bank announcement was incredibly subdued. As expected, no policy changes were made. The content and tone were dovish with the central bank announcing its willingness to accept higher inflation. The ECB also pushed back expectations for interest rate rises and avoided any taper talk. Madame Lagarde’s performance was in stark contrast to that of her colleagues at the Fed and Bank of England. Both are beginning to talk of when to taper and also managing the market’s expectations when it comes to rate rises.
The euro did not make any big moves on the back of the statement or press conference. EURUSD traded range-bound while GBPEUR rose a little on the back of sterling strength. The market will now look at the ECB meetings in September and October for any material shift in sentiment.
Today’s economic calendar is all about July flash PMIs which are scheduled throughout the day. UK retail sales are on the calendar too.
Have a good weekend.
Written by Viv Savani. 8:26am, July 23rd 2021
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