ECB policymakers have perhaps said all that can possibly be said about the outlook for rates this week. The upshot of the range of comments from key officials is that rates will fall a bit more—and will quite likely drop again in December—but the case for a 50bps cut has not been made and more measured moves are (for the moment) preferable, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
Euro steadies on the day
“Swaps continue to reflect 35bps of easing priced in for the December 12th meeting. Repricing ECB risks may give the EUR a bit more of a foothold around 1.08 in the short run.”
“The EUR closed on a relatively solid footing yesterday. The gain was relatively mild but it was the biggest one-day rise in a month. Bearish technical momentum looks neutral on the intraday chart and the daily RSI oscillator is starting to correct from oversold—a positive.”
“Spot is trading above minor trend resistance on the 6-hour chart this morning and that should provide sone underpinning for the EUR at 1.0800/10 intraday. A push above 1.0875, to set a fresh, short-term high, is needed to generate more lift, however.”
