EUR crosses/EUR/USD

ECB: Overwhelming expectation of a 25bps refi rate cut

All 6 major bank reports that I’ve read today expect the ECB to cut the refi rate to 0.5% but leave the discount rate unchanged at 0.0%.

If this happens as expected, I’d expect to see very little change in the EUR/USD, possibly 30 pips either way depending on short-term positioning in the market at the time.

One point we should note is the continued diverging approaches to QE by the Fed and the ECB, and if nothing changes on this front at today’s meeting, we may see some macro buyers return to the EUR/USD market.

  1. I’m not disagreeing with you there Danny 🙂 In fact I was just chatting with an old market ‘legend’ and he preferred to listen to Mr Ed, the talking horse, rather than to their in-house analysts and strategists 🙂

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