Volatility expected through this month because December marks the single biggest month in monetary policy decisions all year.
Starting on Thursday, 3rd is the ECB, where Draghi will announce the outcome of the Governing Council’s “re-examination” of QE. The market is already pricing a 10 basis point cut to the deposit rate and an expansion of QE, however if Draghi over-delivers then there will be plenty more downside in the euro.
In response to the ECB’s further easing, an in order to keep the EURCHF rate within desirable range, the SNB is expected to follow up with monetary easing on December 10.
During the early Asian session on the 10th, the RBNZ has their monetary policy meeting where there is approximately a 50% chance they will cut rates again.
Another huge event is the Fed rate decision on the 16th where the Fed Fund futures market is implying a nearly 80% of the first rate hike since 2006.
The next fortnight should see some volatility in FX before the action quietens down over the Christmas/New Year period.
