One week on from the January ECB meeting and markets find themselves in familiar territory: attempting to anticipate the package that will be announced in March.
As ahead of the December rate decision, the market focus is likely to be on the scale of the deposit rate cut, which is the most direct instrument to weaken the EUR. In the run-up to the March meeting, comments from ECB council members are therefore likely to attract more scrutiny than data.
The impact on the Euro following last week’s ECB meeting was not as uniformly negative as it was after the October meeting, suggesting that investors are likely to be more cautious until further details emerge.
This suggests that EUR/USD could continue to trade within its current range.
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