What to Expect From the ECB’s Policy Meeting
The European Central Bank should count itself lucky. In the last few weeks, most of the spotlight on central banks — and the controversy — has fallen on the Federal Reserve. The ECB has essentially flown below the markets’ radar, even though Europe is facing a much tougher economic outlook. But the meeting this week of the ECB’s Governing Council will reignite interest in the bank’s intensifying policy challenges as it also faces an upcoming leadership change. Read more @ https://www.bnnbloomberg.ca/what-to-expect-from-the-ecb-s-policy-meeting-1.1201640
ECB preview: Dovish Draghi expected, so could EUR/USD rise?
The European Central Bank’s next policy ‘decision’ will be made on Thursday, but the focus will undoubtedly be on President Mario Draghi’s press conference. The ECB is widely expected to announce no new changes to its policy. But Mr Draghi may deliver a cautionary outlook on the economy and therefore interest rates amid the recent weakness in German and Chinese data, and ongoing Brexit uncertainty. The euro’s recent weakness certainly suggests market participants are indeed expecting to see a more dovish than hawkish Mario Draghi. Therefore, with the expected dovishness at least partially priced in, the euro may not react too negatively if he does say what the market already expects. In fact, one has to wonder whether the risks are actually skewed to the upside for the single currency, as almost everyone appears to be bearish on the Eurozone economy and inflation outlook. Thus, any surprisingly hawkish comments from Draghi could see the euro stage a quick rebound. Read more @ https://www.forex.com/en-us/market-analysis/latest-research/ecb-preview-dovish-draghi-expected-so-could-eurusd-rise/
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Why Traders Care?
- EUR Main Refinancing Rate – is short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future;
- EUR ECB Press Conference – it’s the primary method the ECB uses to communicate with investors regarding monetary policy. It covers in detail the factors that affected the most recent interest rate and other policy decisions, such as the overall economic outlook and inflation. Most importantly, it provides clues regarding future monetary policy;
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