Euro is getting a little help today in Forex trading on the expectation that further stimulus is likely to be limited. With markets struggling, and safer assets likely to be supported, the need for stimulus is weakening.
Many analysts and traders had expected something dramatic from the ECB’s meeting in December. However, the situation didn’t pan out, and policymakers didn’t do anything drastic.
Now, many doubt that the ECB will do much in terms of expanding stimulus going forward. After a big slide toward the end of 2015, the euro has been holding its own in Forex trading. Minutes from the last ECB meeting are due to be released, but few traders expect to see something that will lead to increased weakness for the euro.
Right now, falling stocks and demand for safer assets mean that there isn’t much need for the ECB to stimulate the economy in the hopes of weakening the euro. As a result, it’s expected that the euro can stay the course, at least in the short to medium term. Things might change down the road, but for now it appears that the policy divergence expected between the Fed and the ECB won’t be as big as originally thought.
At 15:20 GMT EUR/USD is up to 1.0895 from the open at 1.0882. EUR/GBP is up to 0.7552 from the open at 0.7539.
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