The single currency is under pressure: inflation stagnates while confidence indicators contract and January retail sales figures revised at 0.30% yearly and -1.40% monthly from initial estimates of 2.20% and 1.30%. This should prompt revisions in growth and inflation guidance from the European Central Bank – which meets today.
Although the ECB is expected not to change the refinancing rate, a new long-term refinancing of banks might come into play. Reactions on EUR traders will depend on Draghi’s sentiment at today’s press conference. Further monetary easing amid a potential economic downtrend should weigh on the single currency. Currently trading at 1.1310, EUR/USD is heading along 1.1267 short-term.
By Vincent Mivelaz
