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EUR / USD: ECB meeting does not change the rules of the game

Next week, the European Central Bank (ECB) you will have your policy meeting. Danske Bank analysts do not expect any further measures to be announced. They expect the central bank to send its usual dovish signals, which could raise market expectations for a December decision to raise / extend the PEPP due to its open interpretation of the language. Come to EUR/USD at 1.17 in one month and at 1.20 in three months.

Key statements:

“Over the past 2 to 3 months, we have seen the EUR / USD and European equities have moved widely sideways, while short-term market interest rates have fallen. Overall, this reflects a weakening pace of recovery in the euro area, partly due to the resurgence of the coronavirus. Furthermore, it reflects a slight weakening of the political situation in Europe ”.

“We expect the ECB to adopt a dovish tone, which at the currently high EUR / USD levels could be a small negative factor. Nonetheless, we note that the global outlook is highly influential for the trend in EUR / USD, particularly the outcome of the Brexit negotiations, the US elections and COVID-19. Our target is 1.17 in 1 month and 1.20 in 3 months, which is some very positive global developments in the latter factors. ”

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Credits: Forex Street

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