Vasilis Tsaprounis
Independent Analyst
The pair managed to keep the levels above 1,04 and try to climb to 1,05 waiting for the decision of the US Federal Reserve on interest rates.
The European Central Bank announced an emergency meeting, which surprised the markets and created a modest enthusiasm for the European currency.
As we mentioned yesterday we expected that at some point European officials will take a more active role in the latest developments Regarding prices, inflation and the course of bonds.
The markets will look forward to the different developments and this will feed the direction for the exchange rates.
The announcement of the president of the Federal Reserve of the United States for an increase in interest rates by 75 basis points is now expected and anything different will surprise the markets.
The two major central banks FED and ECB have to face a very difficult task. Should control strong inflationary pressures But without hurting the economic growth. Currently shows a very difficult task with many analysts expressing doubts about whether this is possible.
As the Fed's decision is now fully "price in ", maybe euro support will remain in the spotlight as the unscheduled ECB meeting raises some hopes for the euro temporarily.
Under these developments, we maintain yesterday's position that the exchange rate will move strongly in both directions, but without any extreme move.
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