The euro-dollar parity has been short-lived. The European currency is already trading at its highest since the beginning of July, at $1.0269.
The reason is that the belief is beginning to spread in the market that the European Central Bank (ECB), which will meet tomorrow, Thursday, could opt for a more aggressive measure and raise interest rates by half a point, which would mean leaving negative ground and go against the announcement of a hike of 25 basis points made by the same central bank a month ago.
The change in position of the Frankfurt-based bank would be motivated by the current context of inflation. The growth of prices in the eurozone reached 8.6% in the month of June (a year ago it stood at 2.2%), which is a record since the existence of the single currency. For this reason, some analysts believe that it is necessary to accelerate the withdrawal of monetary stimuli.
“Markets now see only a one in five chance of a 50 basis point move this week, but this idea is hovering among some hawks,” they say from Ebury, a global international payments and currency exchange fintech. "If this forecast is fulfilled, it would be a great bullish signal for the euro," they add.
The first rate hike since 2011 will take place on Thursday. Analysts agree that in 2023 inflation will drop substantially.
