According to a Bloomberg News survey, 62 of the 66 economists polled see the
European Central Bank (
ECB) largely maintaining its current policy this month, but the broad range of expectations (rate cut, negative deposit rates, verbal intervention, non-standard measures) may produce increased volatility around the event as market participants weigh the outlook for monetary policy.
What’s Expected:
Time of release:
02/06/2014 12:45 GMT, 7:45 EST
Primary Pair Impact:
EUR/USD
Expected: 0.25%
Previous: 0.25%
DailyFX Forecast: 0.25%
Why Is This Event Important:
Indeed, the ECB remains poised to further embark on its easing cycle amid the heightening threat for deflation, while central bank President Mario Draghi may look to verbally weaken the single currency in an effort to further insulate the monetary union.
Expectations: Bearish Argument/Scenario
Subdue growth and inflation certainly raises the risk of seeing the ECB surprise with more easing, but even a further willingness to implement additional monetary support could be enough to spark a sharp selloff in the EURUSD amid the protracted recovery in the euro-area.
Risk: Bullish Argument/Scenario
Nevertheless, the ECB may merely stress a more dovish twist to its forward-guidance as there appears to be a growing rift with the Governing Council, and a neutral policy stance may help the euro to sustain a larger rebound as market participants delay their bets for more easing.
Source:dailyfx
