The week after an ECB meeting is often filled with various members’ comments aimed at fine-tuning the Governing Council’s policy message. So far, the remarks have been quite heterogeneous, ING’s FX strategist Francesco Pesole notes.

Consolidation in EUR/USD above the 1.110

“While Chief Economist Philip Lane said there is a clear path ahead for rate cuts, Slovak central bank chief Peter Kazimir probably summed up the ECB hawks’ current view by explicitly ruling out another cut before December. Ultimately, all this post-meeting noise sounds like a signal that President Christine Lagarde’s attempt at defaulting to strict data dependency is both hard to enforce and perhaps not unanimously shouldered by GC members.”

“EUR/USD has found good support on the back of USD softness and has moved in line with our recent expectations. We see no strong reasons for a correction before tomorrow’s Fed meeting. The German ZEW figures today will likely be poor again. The current situation index is expected to slip further to -80, and the expectation metric from 19 to 17.”

“But the euro’s strong momentum has gone through several concerning eurozone activity prints, and the ZEW should merely confirm the widely-priced notion that Germany’s outlook remains grim. We expect a consolidation in EUR/USD above the 1.110 gravity line into the FOMC risk event.”