FX Strategists at UOB Group assessed the prospects of today’s ECB meeting.
“The ECB is likely to offer little shock and awe, but in lieu of new staff forecasts, Draghi’s presser will carry additional weight as market participants try to read between the lines”.
“We think Draghi will continue with his gradual drift in rhetoric towards the eventual end to QE and negative interest rates. However, he is likely to proceed with caution”.
“We expect QE tapering to be discussed at this meeting, and the Governing Council may well hold the first in-depth discussion about the further course of monetary policy in the coming year. It would be interesting to see if the ECB will drop the option to further raise the monthly bond purchasing volume. Dropping that promise from the post-meeting statement would be a small move toward announcing a phase-out of the stimulus”.
“But no concrete decisions are to be expected, with Draghi likely to underline the need for caution in withdrawing the stimulus, even whilst pointing out the Eurozone’s strengthening recovery”.
“It does look like we could head into the press conference with EUR/USD remaining over 1.15 but shy of the recent high. But with expectations for ECB stimulus removal priced in to some extent, we caution that potential disappointment may force position unwind, and EUR may be subjected to corrective moves lower”.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.