I am not a fundamental guru, but you know I like a few major events during the month. Especially the ECB rate decision, every month I must follow the live coverage.
I think that ECB is going to raise rates to 3.50% on Thursday, in line with "strong vigilance" and Trichet signals last meeting. I also think that is very much priced in the market.
Market focus will be on the statement or any hint regarding next year rate outlook. I do not think that Trichet will give any ideas into next year rate outlook or any signal to further tightening in policy.
There is a chance that he will talk down EURJPY or EUR strength at certain levels in FX. (in a statement like. disorderly FX moves are undesirable.)
All in all, I think it will be slightly bearish for the Euro versus US dollar and Sterling pound. especially with markets will have no idea on where interest rates could go beyond this year.
Unless he signals further tightening, and this is far from possible in my view.
I will not attempt to sell euro/dollar ahead of the decision though, it seems that USD selling course has not ended, for own USD reasons. Might try EURGBP or EURJPY short side afterall
