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Euro trend analysis
Nomura's foreign exchange strategy research team wrote an article on the exchange rate outlook for the euro ahead of the ECB monetary policy meeting this week. The main points are as follows:
The euro is not expected to have any major reaction to the ECB's monetary policy statement, but to maintain its medium-term bullish outlook for the euro. Even if the European Central Bank's interest rate decision released in October was disappointing to the market, the euro has been trading very resilient since then. In our opinion, this is mainly boosted by the improvement in the Bank of England's basic balance.
Even though the ECB may not offer new stimulus this week, the downside risks to the euro are limited.
By the middle of 2018, it is expected that the ECB's policy communication will gradually be replaced by hawks, which will result in the market pricing ending QE debt purchase in September next year. After the euro is expected to accelerate the appreciation, but the current phase may continue to maintain range trading.
Beijing time 10:00, the euro / dollar reported 1.1776 / 78.
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