Encouraging Eurozone disinflationary process leaves the ECB room to cut the policy rate again in September which remains a headwind for the Euro (EUR), BBH analysts note.
ECB to cut the policy rate in September
“EUR/USD fell by about 0.3% during the European trading session to lows around 1.0860.”
“There was no new policy guidance from ECB Vice President Luis de Guindos. Guindos said ‘data-wise, September is a much more convenient month for taking decisions than July was.’ In our view, the encouraging Eurozone disinflationary process leaves the ECB room to cut the policy rate again in September which remains a headwind for EUR.”
“The swaps market implies 80% odds of a 25 bp ECB rate cut to 3.50% on September 12. The Eurozone July consumer confidence index is up next (10:00 New York)”
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