EUR/USD: RBS remains bearish from now until Mario Draghi's press conference

RBS economists expect a 0.20% decline of the deposit rate and an acceleration of asset purchases through QE (€85 billion/month) with an extension until March 2017.

"If the ECB does this, it would be more aggressive than what Bloomberg anticipates. The market reaction to the BoJ and Riksbank shows that rate cuts have more influence on exchange rates than increased QE.

Positioning seems relatively light when compared with previous episodes of monetary easing by the ECB. The latest IMM data show modest downward speculation on the EUR/USD. The weakness of the euro is probably high on the BCE's priority list. The ECB could indeed say that we have not yet reached the floor on rates.

So we are shorting the EUR/USD from now until the press conference," says the RBS bank.