EUR/GBP Tumbles—Is the ECB About to Drop a Monetary Policy Bombshell That Could Shake Markets?
Wednesday’s pullback in the pair follows a short-lived rally earlier this week, as investors reassess Eurozone monetary policy prospects amid fading rate cut expectations. The central bank is expected to keep its deposit rate unchanged at 2.00% after cutting rates eight times over the past year. President Christine Lagarde has already signaled that the ECB is “getting to the end of the monetary policy cycle,” reinforcing expectations that the easing phase is nearing its close.
Fresh data released earlier in the day added to the cautious tone. Euro Area Consumer Confidence rose modestly in July, with the index climbing to -14.7 from -15.3 in June, beating forecasts of -15. While sentiment remains fragile, the uptick points to improving household expectations. This follows the ECB’s recent Bank Lending Survey, which showed rising demand for both mortgage and business loans another sign that the economy may be stabilizing.
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