Wednesday, September 14, 2011

Deutsche Bank: ECB Rate Forecast

Analysts at Deutsche Bank believe that the European Central Bank will leave its benchmark rate at 1% until the end of the year.

Then they expect the ECB to cut the borrowing costs in December by 50 basis points in line with lowered growth and inflation forecasts.

The specialists note that there will be a lot of political pressure in November as Mario Draghi takes office as the ECB President after Jean-Claude Trichet. In their view, the ECB will take a long pause after reducing rates in December.

At the same time, the bank warns that one shouldn’t entirely rule out the possibility of October rate cut.

daily eurusd 12-58
 
Chart. Daily EUR/USD

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