EUR/USD: ECB Expected to Maintain Stance at Policy Meeting

ECB Expected to Maintain Current Stance Prior Next Monetary Policy Meeting

Forex markets are looking to the next round of commentaries by central banks around the world and it is highly unlikely that the European Central Bank (ECB) will make a dramatic shift in its current stance at its next meeting. The ECB is also expected to maintain its current rates in the central bank’s policy decision this coming Thursday.

The central bank’s neutral stance is a possible reflection of the euro’s recent lack of activity, but Draghi’s subsequent statements are expected to provide some added volatility to the value of the EUR.  This means that there will be more opportunities to profit when breakout strategies are implemented.   

Far-right threats to the European Union, in general, is expected to eventually reach its turning point once the French national elections and the Dutch general elections take place. Although anti-EU political candidates are starting to dominate their respective campaigns and candidacies on both regions, it is likely that the ECB would refuse to do anything drastic until such time that both countries conclude the results of their respective elections.

Forex Analyst Expectations

In addition, the majority of analysts are saying that in spite of the recent surge in headline inflation rates, the ECB might find it hard to adopt a hawkish facade since core inflation rates remain incessantly low, which brings very disappointing volatility levels for both food and fuel inputs.

Nonetheless, some analysts believe that a hawkish undertone might be more present than ever once the central bank meets on Thursday. However, the central bank is not expected to curb its QE program until the second quarter of this year.  Price feeds in the market’s most accurate forex platform offerings currently show that the EUR/USD is moving even closer to parity.  The ECB is also expected to retain its dovish stance in spite of the fact that inflation rates have already reached its initial target of 2%. but will not make any changes in its current policy in spite of rising inflation rates.

Draghi Statements

Other analysts have also been saying that Draghi’s dovish statement during the central bank’s previous policy meeting is an indicator of a possible ceasefire between the hawks and the doves, with the hawks not as keen on concluding the QE policies as compared to their previous stances on the QE policies.

However, once the European Central Bank hints on either tapering or stopping altogether its quantitative easing program, then this could provide a lot of sell opportunities for the EUR bulls which will then trigger the euro to surge in value.

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