The Fed made a hawkish surprise! The bank would start a discussion about scaling back bond purchases. Besides, it is likely to make two interest-rate increases by the end of 2023 (sooner than expected)!
Will the ECB Press Conference have a positive influence on the euro?
The ECB will announce the main refinancing rate at 14:45 and give a press conference at 15:30 MT time on December 12.
Since 2016 the European main refinancing rate has been kept at 0%. The legacy of the former ECB President Mario Draghi was to keep the rate unchanged until the inflation rate in Europe comes sufficiently close to but below 2%. The preliminary inflation rate for the month of November in the Euro Area was at 1%, which is far away from the target. Hence, the new ECB head Christine Lagarde is unlikely to make any change to the rate. However, the focus of attention needs to be at the ECB Press Conference following the rate announcement and the monetary policy statement. In her speech, Mrs. Lagarde may share some important insights into the state of the European economy and the quantitative ease policy being implemented through the bond purchase program. If her report brings positive prospects, that will support the euro.
- If the ECB Press Conference provides a positive economic outlook, it will support EUR;
- If the ECB Press Conference provides a negative economic outlook, it will create pressure on EUR.
The Federal Reserve will release its statement and announce its interest rate decision at 21:00 MT time. Then, at 21:30 MT time, the central bank will hold a press conference.
Bitcoin has broken above $41,000 for the first time since late May. Follow US Retail Sales at 15:30 MT time!
The Bank of England will release its statement and announce its monetary policy decision at 14:00 MT.
Last week the USD soared versus other major currencies, while gold headed for the biggest weekly loss in 15 months. Let’s see what new moves await us this week!
The US dollar has surged to levels unseen since April after the Fed's decision back on Wednesday. Gold has reversed up from the local dips. Still, this week was the worst for gold in more than a year.