ECB Minimum Bid Rate Decision 01/14/10

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

ECB (European Central Bank) is expected to leave its official interest rate once again at 1.00%, or unchanged.  Analysts surveyed seem to agree that it is too soon for ECB to hike interest rate.  ECB will probably keep rates unchaged at the current level until possible until 2011 as the Euro Zone is still plagued with the imbalanced economic recovery of its member countries, especially with the recent news out of Greece… Therefore there would be no real justification for a rate hike, regardless of what speculators are thinking.  However, in order to fight against growing concerns over inflation, ECB has already started a series of withdrawals of their liquidity program since last year, which means that chances for a surprise rate hike would be much less possible, although the gesture of winding down their stimulus is undoubtedly positive for the EURO.

Furthermore, 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…  And the real mover will be the press conference hosted at 8:30am (in 45 minutes) by ECB Trichet, which may shed some new light over ECB’s monetary policy.

Of course, I suggest that we stick 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…

Related posts:

1. ECB Minimum Bid Rate Decision (Interest rate decision) 12/03/09
2. ECB Minimum Bid Rate Decision 11/05/09
3. ECB Minimum Bid Rate Decision 09/03/09
4. ECB Minimum Bid Rate Decision 10/08/09
5. Forex News Trading EU ECB Interest Rate Decision 05/05/11
6. Trade Plan For RBA Interest Rate Decision 09/07/10
7. RBA Cash Rate Decision 02/01/10
8. Forex Trading Strategy on RBA Interest Rate Decision 10/04/10
9. RBA Cash Rate Decision 11/30/09 (Interest Rate Decision)
10. Forex Strategy For AU RBA Interest Rate Decision 08/01/11

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