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ECB’s Wunsch: There is room for second rate cut barring any major negative surprises

A small deviation from the projections would not change this view dramaticallyThere is probably a premium in waiting for a meeting with new forecasts i.e. SeptemberBut I would not make that a conditionDecision to cut rates one more time is a relatively easy oneBut subsequent moves should only come once inflation is closer towards the 2% target

In his words, it looks to be a case of one more and done for the ECB for this year. The question now is whether economic developments in the next two months will support the case to move in September.

This article was written by Justin Low at www.forexlive.com.

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