The spotlight today is on the release of the Sep ECB minutes (1330 CET) and while historically these post-meeting minutes have had a pretty muted impact on EUR markets, this time could be different given (a) the heightened role of the currency and overall financial conditions in the ECB's policy reaction function; and (b) the fact that discussions may hint at the Governing Council’s QE taper preferences, according to Viraj Patel, Research Analyst at ING.

Key Quotes

“On the first point, we suspect the party line will be wariness over additional EUR strength. However, the recent focus on exogenous and endogenous drivers for the currency – and their differing macro implications – could see the discussions leaning towards acceptance of a strong EUR under certain economic conditions. This small shift in tone would be a giant leap forward for our bullish EUR view.”

“We doubt there'll be too much in the way of exact details on how the ECB might taper its asset purchases. However, we now mainly see upside risks to the EUR from any policy announcement at the 26 Oct ECB meeting; the idea of a dovish – or more cautious – unwind of the asset purchase programme is embedded into markets. Signs that tapering could be more ‘punchy’ that what markets currently expect would lend support to a strong EUR heading into the Oct ECB meeting.”

“Political risks related to Catalonian independence remains the only catch to long EUR positions right now. Given the limited systemic risks to broader EZ financial markets, we think any fundamental EUR fallout is unlikely. Instead, were political noise to fade over the coming days or weeks, we would be inclined to enter long EUR positions against the USD, JPY and CHF. For EUR/$ we wouldn’t rule out a move above 1.20 on the prospects of a more aggressive ECB QE taper plan.”

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

EUR/USD stays in red below 1.0850 after weak German and EU PMI data

EUR/USD stays in red below 1.0850 after weak German and EU PMI data

EUR/USD stays on the back foot and trades in negative territory below 1.0850. Preliminary July PMI data from Germany and the Eurozone came in below analysts' estimates, making it difficult for the Euro to find demand. Focus now shifts to US PMI report.

EUR/USD News

GBP/USD trades below 1.2900 following UK PMI

GBP/USD trades below 1.2900 following UK PMI

GBP/USD remains under modest bearish pressure and trades below 1.2900 in the European session. The risk-averse market atmosphere doesn't allow the pair to stage a rebound, even though the UK PMI data showed that the private sector continued to grow in July.

GBP/USD News

Gold stays hopeful above $2,400, as US PMI data loom

Gold stays hopeful above $2,400, as US PMI data loom

Gold price is looking to build on the previous rebound above $2,400 in Asian trading on Wednesday, despite a buoyant tone seen around the US Dollar and the US Treasury bond yields. Gold traders now look forward to the global preliminary business PMI data for fresh trading impetus.  

Gold News

Bitcoin price volatility expected amid speculation of Kamala Harris joining Bitcoin Conference with Donald Trump

Bitcoin price volatility expected amid speculation of Kamala Harris joining Bitcoin Conference with Donald Trump

Bitcoin price struggles around $66,000 on Wednesday. US spot Bitcoin ETFs experienced minor outflows on Tuesday, coinciding with the continued movement of Mt. Gox funds for repayment, which could exert downward pressure on Bitcoin's price.

Read more

Canada Interest Rate Decision Preview: Bank of Canada eyes another rate cut on easing inflation expectation

Canada Interest Rate Decision Preview: Bank of Canada eyes another rate cut on easing inflation expectation

The Canadian central bank is seen cutting rates for the second consecutive meeting and the decision will be announced at 13:45 GMT. Governor Tiff Macklem’s press conference will follow at 14:30 GMT.

Read more

Forex MAJORS

Cryptocurrencies

Signatures