The ECB is poised to hold interest rates steady at its Monetary Policy Committee
The EUR/USD pair is benefitting from a weakening USD with the pair hitting a high of 1.0948 yesterday, the highest since March this year. The main event of the day is the ECB monetary policy meeting whereby no policy change is expected. No major data developments have happened since last month. Headline inflation fell slightly from 2.6% to 2.5% but core inflation has remained stable at 2.9% due to the services component.? However, investors will scrutinise the speech of ECB President Christine Lagarde for any cue about the timing of the next interest rate cut which is highly expected to happen in September. The interest rate futures market is also pointing in this direction. The European parliament will be today voting on the fate of Ursula von der Leyen who is seeking to secure another term as the Commission president and as such she is required to win an absolute majority of votes in the 720-seat chamber. The EUR/USD pair is currently trading at 1.0933.
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Fed presidents Christopher Waller and John Williams have recently echoed the thoughts of Fed chair Powell regarding the increasing probability of interest rate cuts. Another possible concern, which actually should not influence Jerome Powell, is the November presidential election in the context of which Donald Trump could emerge as the winner. Various encouraging economic figures, for the month of June, were published?yesterday, namely, 1.446?million building permits, 1.353 million housing starts and industrial production grew by 0.6%.? Fed governors Michelle Bowman, Mary Daly and Lorie Logan shall be speaking and initial as well as ongoing jobless claims are due today. The greenback slid below the 104 mark and it is currently trading at 103.79 against peers as the gaze of market is turned towards the ECB policy meeting. ??