Thursday’s ECB policy decision yielded no surprises, according to Scotiabank’s Chief FX Strategist Shaun Osborne. Rates were trimmed by 25bps as expected, and President Lagarde’s approach to future policy adjustments suggests a cautious outlook.
The narrowing yield differentials between the Eurozone and the US have pushed the EUR higher. With limited data available ahead of the next rate meeting in October, a potential cut in December seems likely.
Yesterday, the EUR saw solid gains and closed the week on a high note. Bullish signals on the intraday and daily charts indicate potential for further EUR strength. A break above the 1.1125 consolidation resistance level could signal more gains in the short term, with support now at 1.1055.
Overall, the ECB policy decision and the strengthening of the EUR have important implications for investors and the financial markets. Understanding these developments can help individuals make informed decisions about their investments and financial strategies.