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ECB should pressure EU/USD lower - RBS

FXStreet (Guatemala) - Analysts at RBS explained that the ECB meets this week amid a further decline in medium-term inflation expectations.

Key Quotes:

“We do not expect the ECB to change policy rates, but we do anticipate a clear signal that the likelihood of sovereign asset purchases has increased”.

“The flash estimate for September inflation is released in the Euro-area tomorrow, and the upside surprise in German inflation (+0.8% y/y vs. consensus +0.7% on an EU harmonized basis) suggests that there may be risks to the upside for the Euro-area composite tomorrow”.

“While on the margin a positive for EUR, focus should stay on stagnant growth and falling medium-term inflation expectations. On the growth front, German unemployment statistics are released. EUR/USD downside preferred through the ECB meeting”.

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