The euro is stuck in a range, with little influence from political events. The big event is the ECB decision. What can we expect? Here is the outlook from BNP Paribas and Nomura.
Here is their view, courtesy of eFXnews:
EUR/USD: Assessing Risk Into Next Week’s ECB – BNPP
BNP Paribas FX Strategy Research discusses the EUR outlook going into next week’s ECB meeting
The ECB takes center stage next week with its scheduled meeting on Thursday when it is widely expected to announce plans for asset purchases beyond December.
Our economists forecast a commitment to purchase EUR 30bn per month (down from EUR 60bn) for a period of six months. With recent reports suggesting that a 9-month extension was under discussion, a result in line with our expectation might be viewed as marginally hawkish.
However, we see limited scope for the EUR to benefit from the announcement given the extent to which tapering of purchases has already been priced in.
EUR/USD: Assessing Risk & Direction Into Next Week’s ECB – Nomura
Nomura FX Strategy Research discusses the EUR outlook going into next week’s ECB meeting, noticing that the EUR trading behavior has been changing and reacting to EUR rates and data more significantly.
“EUR appreciation has been clearly supported by stronger fundamentals. The ECB’s assumption for EUR/USD was 1.18 in September, and we think there are limited reasons for the ECB to escalate its negative view of the risk of EUR appreciation at next week’s meeting at the current level of the EUR.
We judge the EUR bias is still tilted towards the upside after consolidation,” Nomura argues.
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