EUR/USD could drop below 1.12 on ECB – Danske Bank

Chief Analyst at Danske Bank Allan von Mehren sees the likeliness that the pair could slip back below the 1.1200 handle in case the ECB disappoints markets later today.

Key Quotes

“As noted in our ECB Preview, amendments of the key intro statement could be somewhat hawkish but key to the EUR reaction will be if and how rate guidance is changed”.

“While expectations on the level of hawkishness from Draghi and Co. today have been lowered recently – not least after reports yesterday that the ECB will take down inflation forecasts across the projection horizon – we expect EUR/USD to drop below 1.12 in our baseline scenario that the ECB keeps open the option for lower rates”.