The European Central Bank (ECB Interest Rate) is committed to a long standing monetary stimulus (an attempt to make the economy grow faster by increasing the money supply) and ultra-low interest rates. The consensus anticipates that the ECB will maintain the status quo and start reviewing its policy only at the March meeting.
What do you think?
Will the EUR continue to rise against the USD?
Or will the ECB take traders by surprise this week?
The European Central Bank (ECB) press conference is held about 45 minutes after the Key Interest Rate is announced. The conference is approximately an hour long and has two parts. Firstly, a prepared statement is read. Secondly, the conference is open to press questions. As the interest rate decision is highly anticipated by markets and priced in the currency, investors are mainly interested in the press conference, which examines the factors that will affect the ECB interest rate decision and deals with the overall economic outlook and inflation.
This month, traders will be particularly eager to hear about the ECB forward guidance, that is the expectations of the bank on the future of monetary policy. Inflation is still under the target set by the Central Bank, but the economy has recovered and the EUR is strengthening considerably against the USD. Many have started to argue that the status quo is becoming unsustainable and the ECB will have to reduce its money printing and raise rates earlier than expected. But what does the ECB think?
Source: AvaTrade Broker
Tags : ECB Interest Rate