Today, the focus of the market will be on the final ECB monetary policy decision. Truly, this is an important event that markets are looking forward to due to the fact that the regulator can, if not decide on measures to mitigate monetary policy, announce that they can be taken in the near future, perhaps even at the September meeting.
So what can he do? In our opinion, the bank, despite all the assurances from the representatives of the European regulator, as well as personally his president, Mario Draghi, had practically no solutions left to effectively remedy the situation.
In the future, the ECB can go on to further reduce the negative deposit rate, which currently stands at -0.40%, which makes negative key interest rate that us unprecedented and currently at zero. The bank will also be forced to "turn on" the printing press again to buy up the government bonds of the euro region. Perhaps, he will also try to come up with something else. But in general, evaluating a limited range of decisions, it should be recognized that they are unlikely to be able to change the overall picture for the better. In addition to economic and political issues, such as Euroskepticism, Brexit, the US sanctions policy towards Europe, as well as the open egocentric behavior of the United States towards the "old Europe" and the overall slowdown in global economic growth, will level the actions of the ECB.
The decisive actions of the European regulator will lead to a further fall in the euro currency, which, however, is most likely to be offset by a game of lower interest rates in the United States and other economically developed countries. We will again witness currency wars similar to those observed during the outbreak of the last economic crisis of 2008. But locally today, the euro currency will most likely continue to collapse following the results of the ECB meeting.
Forecast of the day:
The EUR/USD pair remains under pressure in anticipation of the ECB monetary policy meeting. Any statement by the bank about the upcoming incentive measures and their unexpected adoption today will lead to a collapse of the pair. The pair will fall after crossing the level of 1.1130. First, it will go to 1.1120 and then to 1.1070.
The AUD/USD pair fell to the bottom of the short-term uptrend. It remains under pressure in the wake of the high probability of a decrease in RBA interest rates in the near future, as stated today by the bank manager Philip Lowe. A breakthrough at the price of 0.6965 will lead to its further fall to 0.6900-10.