When is the ECB interest rate decision and how could it affect EUR/USD?

Haresh Menghani FXStreet

ECB monetary policy decision - Overview

The European Central Bank (ECB) is scheduled to announce its monetary policy decision later today at 1445 GMT and will be followed by the usual post-meeting press conference at 1230 GMT. The central bank is widely expected to stick to its plan for winding down the bond-buying program by the end of this year and leave interest rates unchanged at least until next summer.

Mario Blascak, FXStreet's own European Chief Analyst explains: The reason for the monetary policy stability is inflation related. Inflation is stable at the target, so there is no need for the ECB to act. The economic growth is possibly sliding lower as the business surveys report the lowest level of the economic activity in the last 2 years, but that might be easily blamed on Trump’s induced trade uncertainty that is particularly concerning Germany, the Eurozone’s largest economy.

How could it affect EUR/USD?

Though changes to the ECB's policy guidance are unlikely at this meeting, deteriorating macroeconomic backdrop since the September meeting could lead a dovish tone during the press conference and prompt some fresh weakness around the shared currency.

Ahead of today's key event risk, the pair has managed to recover a bit from over two-month lows, set in the previous session, and is holding comfortably above the 1.1400 handle. Further gains, however, looks limited and as FXStreet's own Analyst Yohay Elam writes: The EUR/USD is trading below the 50 and 200 Simple Moving Averages on the four-hour chart. Also, Momentum is leaning lower, and the Relative Strength Index is not reflecting oversold conditions. All in all, the picture is bearish. The recent stability looks like a "dead cat bounce" pattern.

Key Notes:

• ECB Preview: Draghi set to play risks down and keep the path of QE ending in December clear

• EUR/USD recovery looks limited ahead of the ECB – Confluence Detector

• EUR/USD Technical Analysis: Bearish view unchanged. Doors open for a visit to YTD low at 1.1299

About the ECB interest rate decision

ECB Interest Rate Decision is announced by the European Central Bank. Usually, if the ECB is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the EUR. Likewise, if the ECB has a dovish view on the European economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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