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Fighting inflation whilst avoiding recession- a juggling act for the ECB and the EUR/USD today

If we look back a couple of years when the G7 Central Banks (ex Japan) telling all of us that the rise in prices was just a Transitory problem and it would go away, but it did not. That caused the likes of the Fed, BOE and ECB to lift rates exponentially to where they had been for the past decade and more. At the same time the impact of that policy shift did stop prices from surging even more, but its impact is still affecting all of us today. The truth is; those Central Banks were asleep at the wheel and now they are in trouble. Debt servicing across those economies has ballooned. For an extreme example, look at the US now, spending more than $1 trillion on debt servicing and more than they currently do on defence. The ECB is in a similar tight spot with rates at 4.5%, in a Eurozone economy that remains in the doldrums. The argument for them to cut rates is way stronger than it is for the Fed, especially after yesterday. As to whether they jump the gun and do that today is another matter. If they do, the EUR/USD will break below 1.0695 and it will shunt towards 1.05. If they do not cut and the Euro falls anyway that will present an even bigger problem. Yesterday was mostly about  USD/JPY in reality, but today it is entirely on the EUR/USD. All will be revealed at 1.15pm GMT . The EUR/USD is currently trading at 1.0729

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