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All eyes remain on ECB meeting

All eyes remain on ECB meeting

Yesterday, the euro managed to generate some upward momentum in the lead up to the ECB meeting. This is reflected in EUR/USD opening this morning back up at the $1.07 threshold, EUR/GBP has also edged higher to the midpoint of the 85-86p trading band. Elsewhere, GBP/USD is changing hands in the lower half of $1.25-1.26.

As we look to the day ahead, attention is very much centred on the aforementioned ECB meeting, and in turn, this entails event risk for the euro. The Governing Council is not expected to hike rates today. However, it is expected to provide guidance that a rate hike will be announced at its July 21st meeting. There is, though, uncertainty over the pace of tightening from the ECB this year. Therefore, today’s post-meeting press conference from President Lagarde will be closely scrutinised by markets as they look for clarity on the pace/extent of rate hikes. As a result, the euro could see some volatility.

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