On Friday (Oct 28), subsession, / low recovered to trade at 0.9997, up 0.34%.
Analysts at Commerzbank noted that while Ms. Lagarde sounded dovish in her press conference, they still think another big rate hike is still possible at the December meeting.
‘Europe has not given a clear signal that it will raise interest rates sharply next time, because Ms. Lagarde sees downside risks to the economy and may be mindful of weak data indicators,’ she said.
All in all, we continue to expect the ECB to raise the key by another 75 basis points in December.
If the recession starts to show up in data after the start of the year, the central bank will slow down. It is expected to raise its key rate by 50 basis points in early February and 25 basis points in March, ending the process with the 3% deposit rate.
The euro/dollar 4-hour chart shows that the pair is currently trading around the bullish 20 SMA, while technical indicators have eased from extreme levels.
Momentum is southward but above the midline, while RSI is flat after reaching neutral levels.
