Expectations from the meetings of ECB and Bank of England
There will be high attention on the meetings of both European Central Bank and Bank of England. Sure, investors are thinking about possible outcomes, expectations and changes in economic strategies. First of all, we believe that Bank of England will keep refinancing rate on the same level and secondly, it will be a sign that in the short-term refinancing rate will remain on same level as well. Despite the fact, that there is positive news about GB economy recovery it remains fragile and we hardly believe that “Old Lady” will go for the risk by changing monetary policy.
It is very likely that ECB will keep the same refinancing rate as well, because weak results of peripheral countries continue to bother top-level politicians and German economy can not solve all the Euro Zone economic problems on its own. Since there is a successful reduction of bond buying program by US Federal Reserveit can have an impact on EURUSD and the pair will continue to decrease. Even in case of bad US nonfarm payroll statistics it won’t do any good for EUR in the long-run. Mostly it is due to the fact that in the process of economy recovery USA are quite ahead of EU.
That is why Euro and British Pound can be under pressure after the meeting of ECB and Band of England, but massive changes can be seen after Nonfarm Payroll statistics from US tomorrow.
Semen Kamensky