Will the ECB announcement unsettle the euro?

The governing council of the European Central Bank will release their latest monetary policy decision at a press conference tomorrow.

Source: Bloomberg

With inflation still not hitting the bank’s target of just under 2%, many analysts are expecting Mario Draghi and his team to reveal plans for further economic stimulus.

Given elevated market expectations of further easing, one suspects we will need to see a sizeable cut to the deposit rate and a large increase to the asset purchase program (QE), while also increasing the range of assets and an extension to the QE program to satisfy traders. If the market feels underwhelmed, we could easily see EUR/USD aggressively rally and European stocks sold.

However, if there is one central banker that’s in-tune and respected by the market globally, it would be Mario Draghi, and traders are used to Mr Draghi over delivering.

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