EUR / USD: ECB meeting - Today the spotlight. Trading Recommendations

Overview and Dynamics

The undoubted focus of the market today is the ECB meeting at 14:45 (GMT + 3), which will decide on interest rates in the euro area. Further to the press conference, which will begin at 15:30, ECB President Mario Draghi made comments on the monetary policy of the ECB. The opinion of most economists are inclined to think that the ECB will not change until its monetary policy, and the rate will remain unchanged at 0.05%. The ECB may take a pause and wait for the Fed's decision on interest rates in the US. Fed meeting will be held later on October 27-28. However, Mario Draghi may hint at further quantitative easing in light of the unfavorable data on inflation in the euro zone, published recently. While the program of asset purchases in the euro area is the monthly volume of 60 billion euros.

The assumption that the ECB will increase monetary stimulus to support economic growth in the euro area, may be supported on the background of the fact that due to the global economic slowdown, especially China, the central banks of the leading economies of the world in turn provide signals to the easing of monetary policies in their countries.

So on Wednesday, the Bank of Canada left its key interest rate unchanged at 0.5%, lowering forecasts for the Canadian economy in the next two years because of falling commodity prices, and pointed to a tendency to soft policy.

And the Federal Reserve may delay raising interest rates in the US at a later date.

The first sign of a possible softening of monetary policy in the euro area began to comments ECB Governing Council member Ewald Nowotny, who said last week that the ECB will have to use more tools of monetary policy to boost the competitiveness of the euro zone. Nowotny comments on the EUR / USD pair dropped sharply from highs around 1.1500 mark, and now with the opening of the European session, dropping, being near the mark of 1.1300.

On opening day the euro is also reduced in virtually all major cross pairs.

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