What to expect from the ECB
Barclays Capital FX Strategy Research argues that the ECB meeting on Thursday poses 'two-way' risks for EUR/USD.
"We expect that the ECB will leave its policy settings unchanged at its September meeting (Thursday), but the meeting presents several risks for the currency:
1- The ECB could remove the asymmetry around the language of its Asset Purchase Program, with upside risks to the EUR.
2- Growth forecasts likely will be revised higher, as the recent currency strength arguably already reflects the long streak of positive surprises from the euro area economy. While the revision seems widely expected, its size introduces symmetric risks for the EUR.
3- Inflation likely will be revised down, given the rapid EUR appreciation since the last meeting, with downside risks for the currency," Barclays argues.
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