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 once again leave its minimum bid rate at 1.00% or unchanged this month. The majority of analysts agree to this sentiment as according to ECB, it is will keep rates unchaged until 2011 or at the very least, towards the end of 2010 before tightening of their monetary policy. As a matter of fact, according to Credit Suisse Overnight Swap Index, there is zero percent of change for ECB to hike rates during this meeting.
With Euro Zone still remains under pressure of sovereign debit concerns, inflationary pressure subdued, unemployment at record highs, there is just no reason for ECB to hike interest rate at this point.
Furthermore, considering that ECB is not in the habit of surprising the market because any surprise on the world’s most traded currency pair (EUR/USD) would upset economy, therefore I expected everything to be released as expected… 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…
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