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ECB policy action possible soon; Sell EUR rallies - Rabobank

FXStreet (Guatemala) - Analysts at Raboabank said that expectations regarding the course of ECB policy are in the process of being overhauled.

Key Quotes:

“Last Friday’s remarks from ECB President at Jackson Hole have raised the odds of the ECB eventually announced QE”.

“While we expect it is too early to see such a policy change at next week’s meeting, we see some form of intermediate policy action as being possible quite soon; preparations for an ABS purchase program may be complete as early as October”.

“The tone of the ECB committee and its commitment to further policy actions will, of course, be data dependent. For this reason the EUR is likely to be very vulnerable on a weak August Eurozone CPI reading which is due tomorrow and expected at just 0.3% y/y”.

“We expect EUR/USD to trend towards 1.28 and below medium-term and favour selling EUR/USD on rallies”.

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