A lack of hawkishness in the ECB’s commentary could leave the EUR on the back foot – Rabobank

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The most important aspect of today’s ECB policy meeting is any guidance on what happens next. Economists at Rabobank analyze EUR outlook.

Risks for EUR/GBP seen as being well balanced

It is our house view that ECB rates could reach their peak today, though we acknowledge that the risk of one more hike is finely balanced. 

The market is positioned long of the EUR, meaning that a lack of hawkishness in the ECB’s commentary today could leave the EUR on the back foot. 

On the assumption that ECB rates are close to peaking, we see EUR/USD trading down to the EUR/USD 1.08 area on a three-month view. We see the risks for EUR/GBP as being well balanced.

See – ECB Preview: Forecasts from 12 major banks, the final 25 bps?