The European Stocks And Euro Hold Gains Ahead of the European Refinancing Rate

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since March 2016, the European Central Bank (ECB) interest rate was kept relatively low at 0.00% in response to the great recession hit that affected the European Union, the developed and emerging economies. Presently, the interest rate is still maintained low and it is expected to be sustained at that level till full recovery and the core ECB monetary policy goals are met. This monetary policy is enacted with the expectation of stimulating growth and other strong economic drivers. In response to that and other policy fundamental factors playing out, the EUR/USD monthly price pattern is seen swinging between the 1.03249 and 1.25552 multi-month price range.

According to a senior macro strategist at Rabobank, Bas Van Geffen, “the baseline forecast is for the ECB interest rate to remain on hold through 2021, and based on his assessment inflation is transitory and the expectations that they will continue to see it as such.

On the contrary, inflationary headwinds continue to build up to the upside at 3.4%, encouraging the hitting tapering debate within the ECB. Inflation rise is speculated to further grow 3.5% this quarter and then possibly drop low in mid-2022.
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