Interesting snippet from UBS on the European Central Bank and the rate cut outlook:
- Europe has (on a like-for-like basis) the same inflation as the US or the UK, and the ECB is not known for the speed of its decision-making.
- That the ECB looks to be first to cut rates may be due to the narrative around European growth, rather than the substance of economic data.
The ‘narrative’ on EU growth has been around for months now. Its due to slowing growth …
EUR/USD will struggle, at the margin, as the policy divergence widens:
Yesterday I wondered out loud if we see 1.05 before 1.10. Right before it spent the rest of the session trading higher. Maybe I’ll have more luck today 😉
This article was written by Eamonn Sheridan at www.forexlive.com. Source