Those clients with a short-term EUR currency transfer, will have earmarked tomorrows European Central Bank (ECB) meeting as a key the date in this week’s calendar.
ECB President Mario Draghi and the rest the central bank members will meet tomorrow, to decide whether a change in interest rates or monetary policy is required.
Their monthly meeting is always monitored closely by investors and is one of the most significant data releases. This is due to the fact that any change in stance regarding the central rate, or Draghi’s rhetoric regarding any plans to alter the current monetary stimulus programme, can have a significant impact on EUR exchange rates.
Monetary policy is intended to support an economy through times of economic downturn and hardship but with this period seemingly resigned to history, will pressure start to put on the ECB to act and potentially look at winding up their current Quantitative Easing (QE) programme?
Despite the current strength emanating from the Eurozone economy, I think extremely unlikely that we will see any changes in the current stance at tomorrow’s meeting. The aggressive measures Draghi and the ECB put in place have no doubt been of benefit to the Eurozone economy, which was in dire need of stabilisation at the time.
Draghi has been steadfast in his commitment to the current stimulus and the benefits the Eurozone economy have reaped from it.
Only recently he reaffirmed his belief that the current levels of QE could perhaps be diluted over the coming months but not completely dissolved, for fear of any negative repercussions for the Eurozone economy. In fact, he even suggested the current programme could be extended into 2019 if necessary, which indicates that he is hardly likely to change the current remit any time soon.
It is far more likely that he will once again point to its on-going benefits and the protection it is giving and as such I wouldn’t be holding out for a change in stance come tomorrow’s decision.
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