EUR/USD flows: Minor dip out of announcement, but projections nudged up
Minor intraday sell fact on announcement but even with boilerplate language inflation projection nudged up
Inflation risks to upside, growth risks to the downside
Minor ‘sell the fact’ kneejerk out of the ECB with the slow drift up from 1.1610 to 1.1650 on the intraday chart pulled back out of the announcement. On the statement release the ECB sticks by its ‘wont pre-commit, data dependent, meeting by meeting’ language, as well as characterising risks as to the upside on inflation and downside on growth. New forecasts see nearby forecasts revised up, inflation averaging 2.5% next year (2.3% in June), and 2.6% core (2.5%), before returning to headline of 2.1% in 2028(2.0% previously and now 2.3% core).
Notwithstanding the initial intraday long covering move, and the boilerplate language on meeting-by-meeting approach and being well positioned, the fact remains that the projections are ticked up and will have embedded market expectations in the projections.