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25.07.202312:19 विदेशी मुद्रा विश्लेषण और समीक्षा: ECB needs to raise rates to fight inflation

Falling consumer inflation data in the eurozone may convince the ECB not to raise rates further, similar to that of the Fed which, although declared that two more rate hikes may be introduced by the end of the year, may not actually do so due to the similar declining consumer inflation in the US.

Markets expect to see a 0.25% rate hike from the ECB, which will push rates from 4.00% to 4.25%. Based on this, rates for deposits and margin lending may also rise.

However, inflation will remain far from the target level of 2.0%, as the latest statistics indicated that the consumer price index still stands at 5.5% y/y.

This means that the ECB will continue its cycle of raising interest rates, even if the Fed stops raising rates. Such a scenario will halt the corrective decline in EUR/USD, potentially leading to a reversal and a price increase towards the recent July high.

But if the Fed unexpectedly raises rates, the pair may continue the correction for some time until the market finds balance again.

Forecast for today:

Exchange Rates 25.07.2023 analysis

Exchange Rates 25.07.2023 analysis

EUR/USD:

The pair continues to correct downwards ahead of the Fed and ECB monetary policy meetings. It may stay above 1.1000, and then reverse upwards if the Fed keeps interest rates unchanged, while the ECB, on the contrary, raises them by 0.25% on Thursday. Upon reversing, the pair could head towards 1.1340.

XAU/USD:

The pair found support at 1952.50, showing a local upward reversal. It may resume growth, possibly towards 1985.00, if the Fed continues its pause in raising interest rates.

*यहां पर लिखा गया बाजार विश्लेषण आपकी जागरूकता बढ़ाने के लिए किया है, लेकिन व्यापार करने के लिए निर्देश देने के लिए नहीं |

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