The euro is choppy against the pound this morning, as the markets await the outcome from the ECB’s interest rate decision this afternoon. There aren’t expected to be any changes now, but they are expected to signal a rate cut in September. Asset purchases may also be restarted, in an about-turn since bond-buying was capped back in December.
The meeting is also likely to set up what is to come for Christine Lagarde, as Draghi has just three such meetings left in his calendar before stepping down. If the ECB does shift its rate goal from 2% to ‘symmetrically’ above and below 2%, then the door could be open for further, longer-lasting stimulus.
German business climate and expectation figures have just come in slightly below expectations, with a small drop from last month. Although it’s not a positive sign for the Eurozone’s largest economy, it’s not completely out of the blue, and will largely have been priced in.
