What to expect today from the first 2020 ECB Policy meeting? Chief Currency Analyst at HYCM has shared his expectations of today’s European Central Bank rate statement and ECB policy meeting. Check what traders should look for during today’s fundamental movers.
23 January, 2020 | HYCM – At the last ECB meeting in December 2019, the central bank confirmed that they expect to sustain the key interest rates at current levels. Alternatively, the ECB also said that it might lower the interest rates, if the central bank sees the inflation to rise close to the 2% level. At present, the inflation is at 1.3%, which is below the ECB’s target of 2% still.
Other ECB Hints Traders Should Know
Accompanying the ECB rate statement in December 2019, the ECB president Christine Lagarde said that data points out that the growth risks are on the downside. Moreover, the inflation pressure is on the lower levels. Especially, with the concerns of the Eurozone due to the fall out of the China Phase 1 trade deal and the contraction of manufacturing in Germany.
Like many analysts, I expect that the ECB will not make any changes to its interest rates during today’s meeting. However, traders should pay attention on hints of ECB’s next steps. One thing traders should focus on today in the rate statement is if the ECB repeats its call for fiscal stimulus. Bear in mind that fiscal stimulus is mandated through governments, rather than it is a monetary policy/tool by the Central Banks. Interestingly, the successor of Mario Draghi, Christine Lagarde has been repeating the same call for fiscal stimulus since she took over.
First 2020 ECB Policy Meeting: Focus Is on Fiscal Stimulus
Nevertheless, traders should check if the ECB shares any hints about fiscal stimulus, since this will have a positive impact on Euro. Logically, traders should also pay attention to hints that suggest a change of interest rates, since a rate cut would push Euro sellers. Also, vice versa if the ECB hints on a rate hike, this would then empower the Euro buyers.
The ECB rate statement starts at 12:45GMT. Afterwards, traders should not forget the ECB press conference which is due at 13:30 GMT. Traders should always bear in mind that any hints on ECB’s next step could be shared in the final minutes of the ECB Press Conference, so it ain’t over until the conference is really over.
Benefit of EURUSD today with the ECB Press Conference. If you don’t have a trading account yet, then you can simply open a trading account with HYCM.