Vasilis Tsaprounis
Independent Analyst
The single European currency is in a mild recovery mode having moved well away from the 1,10 lows it was at yesterday in anticipation of the European Central Bank meeting.
Yesterday's Ecb meeting and President Lagarde's speech did not surprise, the decision to cut 25 basis points was fully discounted by the markets while Lagarde avoided giving any clear signals about the central bank's intentions at the next meetings.
Bets on another 25 basis points cut by the end of the year remain high but the 4 months is quite a long time and depending on the economic data possible changes could be on the table.
Ηaving left behind the decision of the European central bank, investors are now concentrating their interest on next Wednesday when the Fed is expected to take a similar decision.
After US consumer price inflation data released on Wednesday which was broadly close to estimates bets for 50 basis points cut have almost been eliminated and such a decision would be a big surprise and affect the US dollar quite negatively.
The 1,10 level which was very close to the breakdown eventually proved to be a strong resistance and remains the closest challenge for the US dollar in its effort to find better prices.
Despite the flurry of news and important meetings the overall picture of the market remains the same with a narrow range remaining on the table as investors remain cautious and although the European currency has been in the spotlight in previus weeks, the potential for it to break through quite easily the levels of 1.12 remains questionable.
On today's agenda the only thing that stands out is the University of Michigan's survey of consumer sentiment in US, an indicator of considerable importance that markets often "listen" to.
There is no change in my thinking, I remain on hold waiting 1,12 level for a possible purchase of the US currency.
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