Today’s monetary policy meeting at the European Central Bank is expected not to move the Euro with respect to the dollar. We expect ECB President Mario Draghi to be cautious on rates and present a positive view of the broad economy. The EUR/USD is expected to remain stable along 1.13, despite the US federal shutdown that is causing worry over Q1 growth.
Having ended its asset purchasing program in December, the European Central Bank is facing a challenging situation. It won’t increase stimulus amid weaker economic data. At least one thing is sure: don’t expect a rate hike any time soon! A rise in the ECB’s main refinancing operations rate is expected for December 2019, its first since March 2016. Dragging uncertainties over Brexit discussions and Sino-American disputes are not making the ECB any more hawkish, either.
