Economists at ING aren’t satisfied the ECB can set off a sustainable EUR/USD rally.
A post-hike rally might not final
It’s a shut name, however we anticipate a 25 bps hike by the ECB.
Markets are pricing in a 65% implied chance of a hike, so EUR/USD ought to rise after the announcement if we’re proper. Nevertheless, a full 25 bps are factored in by year-end, and will probably be laborious for Lagarde to persuade markets the ECB can push charges even increased.
Any EUR rally could also be short-lived. We anticipate a EUR/USD post-meeting soar to stall round 1.0800/1.0830 (if not falling wanting these ranges), and regularly quit positive factors because the Greenback’s momentum stays stable.