7:45am (NY Time) EU ECB Rate Decision  Forecast 1.00%  Previous 1.00%
ACTION: EUR/USD       N/A

ECB (European Central Bank) is likely to leave its official interest rate once again at 1.00%, or unchanged.  Analysts surveyed by different news agencies (Bloomberg, Reuters, etc…) seem to agree that it is too soon for ECB to hike interest rate and the time has passed for further rate cuts.  ECB’s next interest rate move is likely to be a hike, but it probably won’t take place until the end of first quarter of 2010.

Furthermore ECB is still plaqued over the imbalanced economic recovery of its member countries, therefore there would be no justification for a rate hike, regardless of what speculators are thinking.

Lastly, judging from past track records, ECB is not in the habit of surprising the market as the implication of a surprise on the world’s most traded currency pair (EUR/USD) would upset economy, I do not expect to see a surprise today..

But of course, we should still be around during the release just in case ECB decides to surprise the market, but most likely we won’t see much of a market volatility after the release as the real market mover will be the 8:30am Trichet Press Conference, which I’ll be trading it live.

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