The ECB will announce an interest rate hike today?

Today at At 13:45 we will know the decision European Central Bank on interest rates and the asset purchase program. In March, the ECB unexpectedly accelerated the asset purchase schedule for the coming months and announced that asset purchase program (APP) it may end in the third quarter of this year, if medium-term inflation prospects are not weakened.

Inflationary pressure seems to have continued to build up since the March meeting, the war in Ukraine is far from over, and the sanctions imposed on Russia, including a potential energy trade ban, may continue to put pressure on prices and slow down economic recovery.

Raise? Not this time

Even so, the ECB is expected to leave interest rates at record lows today, but will adopt a more hawkish tone than recently. This may be important for the EUR / USD exchange rate. Before making a decision EUR / USD exchange rate seems to rise above the 1,0900 level.

The bank is also likely to maintain its commitment to a faster withdrawal of monetary stimulus and ultimately set a clear timeline for ending QE, while reiterating that interest rate hikes will not come until the end of the asset purchase program (APP).

According to Reuters, the markets are currently assuming an increase in the ECB's deposit rate this year by a total of 70 basis points.