At the ECB’s January meeting, there was a unanimous decision to leave key interest rates on hold and forecasters anticipate the same neutral outcome this week. Thursday’s announcement is widely expected to leave the deposit rate at its 4.0 percent record high while the refi rate stays at 4.50 percent and the rate on the marginal lending facility at 4.75 percent. However, recent comments from Governing Council (GC) members show a widening split over how soon key rates should be lowered. For now, most would seem to prefer to wait for more data, crucially on underlying inflation and wages, but the more dovish policymakers are clearly eyeing a cut sooner rather than later. Just a couple of weeks ago, Bank of Greece Governor Yannis Stournaras was calling for a move no later than June despite policy supposedly being data dependent. Still, such disagreements are only to be expected as a major shift in policy approaches and, to this end, investors will be watching especially closely the bank’s updated inflation forecast for clues about how far rates might be lowered in 2024…
UsdCad not liking the December highs around 3618 so I’m out flat with a small gain averaging of 3505 entry and touchy price activity trying in the 3520+ area. Going to let this run its course.
JP – one would think! As long as they keep liberal arts out of it, but it doesn’t go that way in places like Berkely Univ. My belief is 1 hour field trips into the worst banks in one’s locale would be more of a lesson in one day than 10 semesters of politically slanted blab mixed in. Side note – I think ChfJpy is finished with the 170 to 171 range. Maybe one more push in there but expecting no dice.
JP – I’m long UsdChf with you and have a resting buy in Usd/Cad lower toward the figure. On the side, EurJpy is virtually guaranteed to get to 162 at least ultimately in time.