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The week started off on good footing for the euro on Monday, supported by economic developments as well as monetary policy expectations.

Dollar, on the other hand, kicked this week’s trading session off on a rather weak footing despite US consumer borrowing coming out better than expected.

ECB Expectations Less Dovish

Traders and investors alike might expect euro to remain somewhat unchanged ahead of the widely expected ECB monetary policy meeting on Thursday. However, EURUSD kickstarted the week with a fresh 3-day high at $1.1067.

Apparently, there are growing expectations that the ECB will be less dovish than anticipated last week. After all, Draghi won’t want to leave his position providing a pessimistic outlook.

Fundamentals identify three areas of focus for this week’s meeting:

– potential interest rate cuts and how deep into negative territory, if any
– the size of the easing package and its form (e.g reinitiating TLTRO II or bond-buying), if any, an...


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