Vasilis Tsaprounis
Independent Analyst
The single European currency remains in a narrow trading range between 1,10 and 1,1050 levels as investors are extremely wary of taking big bets ahead of US consumer inflation announcement later in the day and tomorrow's European Central Bank meeting.
Yesterday as expected did not provide any surprises with the trading range limited to only 35 basis points between 1,1015 and 1,1050 as the very poor agenda and the wait for today and tomorrow's developments took out the big bets from he table .
Bets on interest rates outlook remain unchanged with most likely a 25 basis point rate cut this Thursday by the European Central Bank and next Wednesday on the 18th by the Fed.
However, there is considerable room for surprises as several officials from both central banks have expressed differing views.
Today's announcement on the path of US consumer inflation is perhaps the most critical macroeconomic data ahead of Fed's meeting, and any major surprise could affect bets on next Wednesday's decision.
Officials from both central banks are trying to walk a tightrope between trying to reduce inflation to the 2% target while also protecting the economies from the possibility of a recession.
As we approach the European Central Bank meeting a wait-and-see attitude remain the best thought as any possible surprise carries the risk of major volatility.
No changes on my thought of buying again the US currency at some sharp peak near the 1.12 level or maybe even above this.
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