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ECB event risk proves a mild upside risk to EUR/USD – ING

The European Central Bank (ECB) announces its rate decision today. Economists at ING analyze how the policy announcement could impact the EUR/USD pair.

Outside risk to 1.0980/1.0990 should ECB pushback against easing expectations prove surprisingly effective

ECB President Christine Lagarde will try to avoid being drawn into any pre-commitment over a summer rate cut. In theory then, if she can avoid this and leave markets with a sense that the ECB is truly data-dependent, short-term Euro interest rates could nudge a little higher and support FX pairs like EUR/USD and EUR/CHF. 

We would say that the ECB event risk proves a mild upside risk to EUR/USD – but the carpet could be pulled from under the Euro should President Lagarde somehow convey the message that the policy rate will be getting cut in the summer after all. 

1.0850-1.0950 looks the EUR/USD range, with outside risk to 1.0980/1.0990 should the ECB pushback against easing expectations prove surprisingly effective.

 

France Business Climate in Manufacturing came in at 99 below forecasts (100) in January

France Business Climate in Manufacturing came in at 99 below forecasts (100) in January
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US GDP Preview: Economic growth expected to moderate at year-end

The Gross Domestic Product (GDP) report for the fourth quarter, to be released by the Bureau of Economic Analysis (BEA) on Thursday, is forecast to show an expansion of the US economy at an annualized rate of 2% following the impressive 4.9% growth recorded in the previous quarter.
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