ECB “will wait until the last minute to decide between a rate hike of 25 or 50 basis points,” says Ebury’s managing director.

This week is marked in the calendar as one of the most important days of the year in the economic calendar. Meetings of the European Central Bank and the Federal Reserve are on the agenda and it is not yet certain what stance central banks will adopt.

In addition to the Federal Reserve meeting on Wednesday, followed by the European Central Bank meeting on Thursday, we have the release of a slew of important economic data, including the monthly report on the US labor market, and the quarterly survey of bank lending in the eurozone. and Eurozone inflation figures for April, just two days before the European Central Bank meeting.

“This means that some board members will wait until the last minute to decide between a 25 or 50 basis point rate hike, increasing uncertainty and potentially volatility in the foreign exchange market,” David Brito, managing director of Ebury, believes.

However, Iberi sees markets appearing to be leaning towards a “hawkish 25 basis point rally” at the ECB meeting on Thursday.

“Analysts believe we will see a slight retraction in core inflation data, but this indicator has proven to be tougher in the eurozone than in the US, and market hopes have already been defrauded previously,” they consider.

David Brito also explains that, in the past week, there have been “no very telling movements among the major currencies”, with the exception of the Japanese yen, which has depreciated due to the Bank of Japan’s refusal to embark on a tightening monetary policy, and the Brazilian real, which has continued to recover this year and is The second best performing currency after the Mexican Peso and ahead of the British Pound.