ECB‘s high inflation forecasts offer little support
The euro found some support overnight after reports that new ECB staff forecasts to be released tomorrow suggest CPI will be above 3% next year, compared with expectations for 2.7%. This means that, based on these forecasts, the ECB is likely to be more hawkish and supportive of the euro.
There were a lot of changes at Thursday’s meeting. However, the most important part should be a 25 basis point hike – which is priced at just 54% – and this factor should cause EUR/USD to hold support at 1.0700.