EUR/USD set to rise on weak US data amid hawkish ECB commentary – SocGen
|European Central Bank members Klaas Knot and Robert Holzmann signaled they would support tapering down the institution's emergency bond-buying scheme after preliminary inflation figures beat estimates. EUR/USD fades from 1.1845 high and needs weak US ADP jobs and/or ISM Manufacturing PMI figures to resume its advance, economists at Société Générale report.
Summer is over in Frankfurt
“It was still deemed premature to discuss recalibrating PEPP in June and July, but the scales have now tipped in favour, resolutely for the hawks, of a debate.
“ECB’s Knot sees ‘credible perspective for inflation to return to 2%’, favours maintaining optionality next week. Holzmann says slowdown of PEPP purchases ‘definitely a topic next week’.”
“The EUR/USD pair hit a wall at 1.1845 and must hope for soft ADP and/or manufacturing ISM for the mini-revival to carry on.”
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