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The big news was out already at the October meeting. The ECB will halve the volume of its bond-buys in January to 30 billion euros per month and the program will run through September 2018. Draghi left the door open to what happens afterward, and that was a dovish sign that sent the euro down.

Will Draghi try to repeat the same trick now? He may certainly try.  Euro-zone rate decision: Thursday, 12:45, press conference at 13:30.

Since that previous ECB decision  we have seen weak inflation reads, especially with core CPI slipping to 0.9%,  This vindicated Draghi’s dovishness. But come December, no big announcements are predicted. What we will get enough is a message from the data. The ECB will publish new staff forecasts for inflation and growth. A downgrade of inflation forecasts could serve to weaken the euro and Draghi could join in.

However, it is hard to ignore the robust growth, especially in Germany (0.8% q/q). As usual, Draghi will continue his balancing act. If he talks about ending QE after September, the euro will jump, but this is unlikely. The ECB can wait until around June to make such future announcements.

Looking at the charts, EUR/USD is now closer to the bottom of the range. Draghi can try to push the pair lower and make it fall over the edge. But, given the strong growth and the recent range trading, there is a greater chance that markets ignore him. Ignoring him does not mean thinking that QE will surely end in September, but just waiting until further hints come along.

And what does EUR/USD when it waits? It rises. The euro-zone has a trade surplus and the US has a trade deficit. Usually, these forces are pushed aside by speculation. But we are nearing the end of the year and speculation is winding down. So, these natural flows of trade could have the upper hand.

What do you think?