EUR/USD is awaiting the ECB decision with the updated forecasts. What can we expect?
Here is their view, courtesy of eFXnews:
We expect the ECB to maintain its dovish stance at the meeting this week although inflation has reached the 2% target.
The reason why we do not expect the ECB to react to the stronger inflation figure is that it is driven by the volatile energy and unprocessed food price inflation, whereas the underlying price pressure remains weak. The ECB has said it will not change its monetary policy based on such a rise in inflation and in the introductory statement from the latest ECB meeting it was communicated that ‘the Governing Council will continue to look through changes in HICP inflation if judged to be transient and to have no implication for the medium-term outlook for price stability’.
