empty
 
 

Forex Analysis & Reviews: ECB will continue to raise rates in 2023
time 09.12.2022 01:10 PM
time Relevance up to, 10.12.2022 10:13 AM

Euro is gaining, albeit gradually, after the deep correction earlier this week. This is because forecasts from several leading economic agencies say the ECB will raise rates rates twice more, including the half a percentage point next week.

This image is no longer relevant

Borrowing costs are also expected to increase by half a percentage point in February next year, which means that the deposit rate will peak at 2.5%. Aside from that, the ECB is presumed to announce the reduction of bonds from its balance sheet starting next week as it has been accumulating so much since the crisis started.

All of this is driving up risk appetite even though the Federal Reserve is likely to be more hawkish in its announcements next Wednesday. And despite the strongest monetary tightening in Europe's history, there are talks that the ECB is still lagging behind other central banks in fighting inflation. Prices are now five times the 2% target although recent reports suggest that the rise in the consumer price index has slowed down. Even so, no one expects inflationary pressures to fall precipitously as the eurozone faces an equally serious energy crisis ahead.

The biggest challenge for the ECB will be to convince the market that it really wants to fight high inflation. However, consumers believe that they have not done enough, saying their expectations for inflation over the next 12 months have risen to 5.4%. Economists have also forecast price increases of 6.1% in the eurozone in 2023 and 2.2% in 2024. Alongside this, the economic outlook for the region is deteriorating. The slowdown in GDP growth has affected even the most hawkish members of the Governing Council, who recently reversed their policy stance and called for only a 50 basis point interest rate hike in December.

This image is no longer relevant

On the swap market, the maximum interest rate is expected to be around 3%. At the same time, it is predicted that in return for a more aggressive policy, the ECB will announce the start of QT as early as next quarter.

This is why demand for euro has risen, bringing it near 1.0590. A break above this is likely to push the quote up to 1.0640 and beyond, a decline below 1.0540 will increase the pressure and push EUR/USD to 1.0500 and 1.0440.

In GBP/USD, a break above 1.2280 will bring the quote to 1.2340, and after that to 1.2410. Pressure will return if bears take control of 1.2220, which could end up with a further collapse to 1.2160 and 1.2100.

Jakub Novak,
Chuyên gia phân tích của InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    THAM GIA CUỘC THI
  • Tiền gửi lần truy cập
    Ký quỹ tài khoản của bạn với $3000 và nhận được $1000 nhiều hơn!
    Trong Tháng 02 chúng tôi xổ $1000 trong chiến dịch Chancy Deposit!
    Có được một cơ hội giành chiến thắng bằng việc ký quỹ $3000 vào một tài khoản giao dịch. Đáp ứng được điều kiện này, bạn trở thành một người tham gia chiến dịch.
    THAM GIA CUỘC THI
  • Giao dịch khôn ngoan, thành công
    Nạp tiền vào tài khoản của bạn với ít nhất $ 500, đăng ký cuộc thi và có cơ hội giành được các thiết bị di động.
    THAM GIA CUỘC THI
  • 100% tiền thưởng
    Cơ hội duy nhất của bạn để nhận 100% tiền thưởng khi gửi tiền
    NHẬN THƯỞNG
  • 55% Tiền thưởng
    Đăng ký tiền thưởng 55% cho mỗi lần gửi tiền của bạn
    NHẬN THƯỞNG
  • 30% tiền thưởng
    Nhận 30% tiền thưởng mỗi khi bạn nạp tiền vào tài khoản của mình
    NHẬN THƯỞNG

Recommended Stories

The euro sets a bad example

The European Central Bank was late to the party and is now trying to convince investors that it will be the last to leave. In other words

Marek Petkovich 13:02 2023-02-05 UTC+2

GBP/USD: brief results and expectations

The Bank of England raised its rate by 50 bps to 4%, the highest level since October 2008. However, the Bank forecasts that annual U.K. inflation will fall from

Jurij Tolin 12:59 2023-02-05 UTC+2

Analysis of the trading week of January 30–January 3 for the GBP/USD pair. COT report.

The GBP/USD currency pair has also begun a very strong decline this week. Despite its drop from about a month ago, we also anticipated a decline in the value

Paolo Greco 18:15 2023-02-04 UTC+2

Analysis of the trading week of January 30–February 3 for the EUR/USD pair.

The EUR/USD currency pair has attempted to maintain its recent upward trend once more this week, although, during the past two weeks, it has begun to noticeably drop. About

Paolo Greco 17:39 2023-02-04 UTC+2

The U.S. dollar is losing its appeal as a safe haven: what does this mean for the EUR/USD pair?

A strong U.S. dollar was one of the main headwinds for gold and all precious metals last year as investors embraced the currency as a safe haven. But this forecast

Irina Yanina 16:42 2023-02-03 UTC+2

Weak US jobs data will support equities and put pressure on dollar

Markets continued to take advantage of the positive sentiment that emerged after the FOMC meeting on Wednesday. This is not surprising since the start of the new year, they have

Pati Gani 13:22 2023-02-03 UTC+2

GBP/USD. Overview for February 3. 2023

The GBP/USD currency pair increased as well, though far less significant than the EUR/USD pair. Additionally, this situation ought to have caused traders to pause. Why is the euro strengthening

Paolo Greco 11:20 2023-02-03 UTC+2

EUR/USD. Overview for February 3, 2023

The EUR/USD currency pair was moving in multiple directions on Thursday, but the previous evening it left the side channel it had been in for the previous three weeks

Paolo Greco 10:47 2023-02-03 UTC+2

Bitcoin rallies on Powell's remarks

Bitcoin's 40% rally in January, the best in a month since 2020, massive capital inflows into cryptocurrency-focused ETFs, and a $250 billion increase in market capitalization over the past four

Marek Petkovich 10:17 2023-02-03 UTC+2

EUR/USD: demand falls despite latest ECB rate hike

The ECB announced a 0.5% increase in its interest rate and explicitly said that there could be a similar one in March, depending on the economic data that will come

Jozef Kovach 08:21 2023-02-03 UTC+2
Không thể nói chuyện ngay bây giờ?
Đặt câu hỏi của bạn trong phần trò chuyện.