Today, the ECB policy meeting takes center stage. While no changes are expected, investors may be eager to find out whether Draghi will appear worried with regards to Eurozone’s economic momentum or not. During the Asian morning Friday, the BoJ takes its turn. Our view is that this meeting will not result in any fireworks. Ahead of the ECB, Sweden’s Riksbank decides on policy as well.
The Spotlight Falls on the ECB Meeting
The euro traded lower against most of the other G10 currencies yesterday. It gained only against NOK and NZD, while it traded virtually unchanged versus SEK and JPY. The main gainers against the common currency were CAD, USD, and AUD in that order.
Today, euro traders will be sitting on the edge of their seats in anticipation of the ECB monetary policy meeting. When they last met, policymakers kept monetary policy unchanged, but dropped the QE easing bias out of the statement. However, at the press conference following the decision, President Draghi downplayed the importance of the decision. When asked, he noted that it was a backward-looking decision without signals for either the Bank’s expectations or its reaction function.
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