ECB comes in focus as the much anticipated meeting approaches – MUFG

By FXStreet FXStreet (Delhi) – Derek Halpenny, Research Analyst at MUFG, suggests that we had been pretty convinced that the ECB would not take any action at the forthcoming meet but have to admit we are not as convinced after reading the comments made by ECB Governing Council member Nowotny in a speech in Warsaw yesterday where he was pretty pessimistic in regard to current economic conditions in Europe.

Key Quotes

“If the dollar does advance sooner rather than later, it may well be versus the euro given the monetary policy meeting is taking place next Thursday. In admitting that the ECB was “clearly” missing its inflation target he stated that additional “structural instruments” were required in order to get growth going in the euro-zone.”

“There was a strong message to governments to do more in regard to structural reform but the reality in the euro-zone for some time has been that the onus has rested on the ECB to take action. While Nowotny and probably most ECB Council Members are frustrated with that, the ECB may soon feel obliged to take additional action.”

“The comments from Nowotny appear more grim than his previous comments and that may well reflect the evidence of renewed economic weakness …read more

Source:: FX Street