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Monday, December 04, 2006

EUR/USD: Inflation Leak Impacts 2007 Outlook

The leaking of a report from the ECB, that they may cut their 2007 inflation forecasts to 1.8/1.9% is said to have impacted the Euro earlier and helped add some of the short-term sellers.

FT Deutschland has noted the article on their website and suggested that the rate will be downgraded from the current +2.4%, thus meaning less potential for 07 rate hikes. However, the unnamed source does suggest that growth projections will be raised from +2.1% to +2.2/2.3%.

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