The markets will focus on the ECB's final decision on monetary policy today. Surprises are not expected, since all the parameters of the monetary exchange rate should remain unchanged. In the meantime, the currency traders left the Euro currency alone, which clearly suggests that they will take some active steps after the meeting is done.
Based on the forecasts, the regulator should leave the deposit rate unchanged at the level of -0.5%, the key interest rate at 0.0% as well as the margin lending rate at 0.25%.
As for the content of the ECB's press conference, we believe that Lagarde will talk about the negative impact of the coronavirus pandemic on the region's economy, but at the same time, she will try to be optimistic, since she can not behave differently, despite the fact that the situation around COVID-19 in continental Europe remains disastrous. Moreover, she will focus on the vaccination process and the latest positive economic data.
How can the euro react to the results of the ECB's meeting and C. Lagarde's speech? We are inclined to believe that the euro will primarily receive support against the dollar, which largely depends not on the situation around it, but on the weakness of the US currency. This remains under pressure due to massive support measures and stimulus from the Ministry of Finance and the Federal Reserve.
We believe that if the positive mood in the markets, which returned on Wednesday, continues today, it will put pressure on the dollar and definitely support the euro. The publication of America's positive data on the number of applications for unemployment benefits, as well as the number of sales in the secondary housing market for the month of March may also add pressure to the national currency.
Assessing the general market situation, we believe that the US dollar will be under pressure again after its recent local recovery against the background of demand for risky assets and the general expectations of investors regarding the continuation of the global economic recovery after the acute phase of the COVID-19 pandemic.
Forecast of the day:
Following its correction to the level of 1.1995, the EUR/USD pair is likely to continue rising to 1.2100 after the ECB meeting.
The USD/JPY pair will continue declining first to 107.75 and then to 107.30 if it breaks through the 107.90 mark in view of the recovery in demand for companies' shares and positive data on the US economy.