On Wednesday, the major currency pair is stable in anticipation of the ECB’s decisions.
EURUSD can’t run away from expectations that invade financial markets shortly before the September meeting of the European Central Bank. The current quote for the instrument is 1.1049.
Market players are anxiously waiting for the ECB’s meeting and decisions, on both the benchmark rate and a possible QE in the Euro Area. They really want to know whether these measures may be effective against the current economic slowdown in the Area. In addition to that, it will be interesting to know how much lower the regulator’s rates might be.
The interesting point is that earlier investors already expect the ECB to make some critical decisions on the QE, but the regulator took a strong stand at that time and disappointed them. Will the current “dovish” market sentiment confuse the ECB? And will the measures the regulator is ready to offer be enough?
It is assumed that the ECB may cut the rates, guarantee low rates for a long period of time, compensate banks their losses due to low crediting rates, etc. Indeed, it might work, but without an appropriate QE program, the effect of these measures might be “blurry”. Moreover, some European countries are strongly against the QE program the way it is usually implemented.