5 Dec 2013
Flash: EUR remains resilient ahead of ECB - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the euro continues to remain resilient with the ECB’s trade-weighted index back close to its annual highs from late October.
Key Quotes
“The ECB’s surprise decision to lower its refi rate by 0.25 point at their last meeting on the 7th November had only a modest and temporary negative impact upon the value of the euro, and at best has only helped to reduce the risk of further strength materializing in the near-term.”
“We do not anticipate that the ECB will ease monetary policy for second consecutive meeting today although comments from President Draghi at the press conference will likely remain dovish.”
“The updated ECB staff forecasts are expected to support their decision to lower the refi rate at last month’s meeting with inflation and real GDP projections expected to signal that both will remain subdued in the coming years.”
“The midpoint projection for CPI in 2015 is expected to be well below their target (1.4%) keeping the door open to further easing ahead if inflation disappoints again in the near-term. The impact upon the euro is expected to be modest unless President Draghi provides a stronger signal of further easing. In the UK, the BoE are expected to leave monetary policy unchanged.”
Key Quotes
“The ECB’s surprise decision to lower its refi rate by 0.25 point at their last meeting on the 7th November had only a modest and temporary negative impact upon the value of the euro, and at best has only helped to reduce the risk of further strength materializing in the near-term.”
“We do not anticipate that the ECB will ease monetary policy for second consecutive meeting today although comments from President Draghi at the press conference will likely remain dovish.”
“The updated ECB staff forecasts are expected to support their decision to lower the refi rate at last month’s meeting with inflation and real GDP projections expected to signal that both will remain subdued in the coming years.”
“The midpoint projection for CPI in 2015 is expected to be well below their target (1.4%) keeping the door open to further easing ahead if inflation disappoints again in the near-term. The impact upon the euro is expected to be modest unless President Draghi provides a stronger signal of further easing. In the UK, the BoE are expected to leave monetary policy unchanged.”