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The European Central Bank is sending mixed messages regarding its next moves. On one hand, the economic situation is improving with growth picking up and employment on the rise. On the other hand, inflation, the ECB’s mandate, is hardly moving.

In his Sintra Speech, Draghi talked about reflation replacing deflation and that the ECB will gradually remove stimulus. This “taper-talk” sent EUR/USD shooting higher. But later, the ECB “clarified” his words, trying to cool bond yields and the euro. Following statements by the ECB, members have been mixed.

September for the taper

The bond-buying scheme of 60 billion euros is set to end at the end of the year. After this, markets expect a Fed-style tapering of bond buys until they reach an end, but nothing is certain. An announcement about the next steps is expected at the next big meeting of the ECB in September.

Yet before September, the President of the ECB goes to another big gathering of central bankers, this time in the US. Draghi will attend the Jackson Hole Symposium in Wyoming. August 24-26.

Draghi last attended this event in 2014. He then laid the ground for further loosening of monetary policy that culminated in the announcement of QE in January 2015.

Will he now announce the beginning of the end of QE? With all the mixed messages, speculation is rife.

EUR/USD currently holds its ground, hanging onto to the 1.14 level. It remains above the pre-Sintra Speech levels, under 1.13, but not going anywhere fast. The next developments probably depend on inflation developments.

More:  EUR: En-Route To Break Two And Half Year Range; Where To Target? – NAB

The ECB convenes next Thursday, July 20th, to set its rates, but no decision is likely.