The euro gains against the greenback as investors wait for the ECB rate decision later today to see if they will raise rates by 25 basis points, following a report saying that the central bank expects inflation in the euro-area to remain above 3% next year. It will be a knife-edge decision and having this report coming out a day before the central bank’s meeting can induce us to think they will hike. But the current dilemma of whether to hike for the 10th consecutive time today will be the main indicator on next year’s inflation projections.
EUR/USD gains 0.16% on the day and consolidates mid 1.07-1.08 and AUD/USD gains 0.3% to trade at 0.6440. USD/JPY falls towards 147 and GBP/USD makes his way to 1.25. WTI Crude is up 0.4% to $88.91/bbl, hitting a 10-month high after the international energy agency stressed a potential supply shortfall.
US CPI released yesterday showed that inflation in the US has accelerated in August by the most in over one year as gas prices increase. This hotter-than-expected print will keep the Fed on its toes and will surely leave the door open for discussion regarding any rates moves for the November or December meeting.