EUR/USD: the forecasts of 2 major banks regarding impact of tomorrow's ECB meeting

Tomorrow's ECB meeting will undoubtedly be the most critical event of the week for the EUR/USD pair, although few analysts expect monetary policy decisions after the measures announced at the previous meeting.

However, the ECB's language will allow us to know more about its future intentions, and to assess the chances of the central bank acting again at the end of the year or later.

Below are the forecasts of 2 banks for this major event:

Danske Bank

"This week's ECB meeting is Draghi's last meeting before he leaves office on Halloween. Despite lower inflation expectations, we do not expect any new measures or monetary policy changes, as last month's package has not yet been implemented. Emphasis will be placed on the recent public disagreement within the Board of Directors as well as on the gradual implementation of the decisions of the previous meeting.

In the absence of a policy change at the ECB meeting, we do not expect a change in the current market dynamics from the ECB, but rather in the global environment. Market reactions to the ECB meeting are therefore expected to be relatively moderate, although we acknowledge that a slight rise of the EUR/USD is possible."

ABN Amro

"After announcing a package of measures in September, it seems unlikely that further action will be taken at this meeting. However, the arguments for further recovery remain strong and it will be interesting to see whether the ECB explicitly acknowledges the weakness of recent data, which would pave the way for further revisions at the end of the year."