Currency Analyst since 2010

ECB press conference: 4 scenarios from TDS

Analysts at TD Securities have set out several scenarios of today’s ECB meeting and press conference. The specialists do not believe that the European Central Bank will act now, so, in their view, the focus will be on what the regulator’s president Mario Draghi says.

The scenarios are the following:

1.       Possibility: 40%

Draghi will underline the market’s uncertainty. There will be no direct hints on the potential increase in easing, but Draghi will repeat that the ECB is ready to act and thus the expectations for the ECB’s move in December will remain. EUR/USD will trade in the 1.1300 area.  

2.      Possibility: 40%

Draghi will say that if the euro area’s economic indicators doesn’t improve in the near term, forecasts will be reduced in December and the door for more QE this year will be open. EUR/USD will slide to 1.1235. 

3.      Possibility: 10%

Draghi will rule out any further rate cut. EUR/USD may spike towards 1.1500.

4.      Possibility: 10%

Draghi will say that the ECB won’t increase QE unless the euro area’s economic outlook keeps worsening. EUR/USD will break above 1.1500, but should be stopped by 1.1561 (August 21 high).



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