Could this be the calm before the storm? EUR/USD stayed within a range yesterday, as it failed to establish and new highs or lows. The pair ended up closing at 1.2903, just 15 pips below its opening price.
The only piece of data from the euro zone yesterday was retail sales figures, which actually came in with an upside surprise. Sales rose by 0.1% last month, which was the complete opposite from the anticipated 0.1% drop.
For today, we could be in for some wild moves as the hotshots over at the European Central Bank will be announcing its interest rate decision today.
Yes, you might be thinking that with the central bank already announcing the Outright Monetary Transactions program last month, the ECB has already pulled the trigger on additional quantitative easing measures. But keep in mind though, that the OMT program can only be activated if a country requests for it. That means that liquidity won’t necessarily be pumped into the economy!
That said, there is the slight chance that the ECB could still be open to an additional rate cut later on this year. Tune in at 12:30 pm GMT, when ECB President Draghi is schedule to step up to the plate. If Mario takes a bearish tone, it would be taken as a sign that the ECB is still very cautious about the outlook of the economy and that it may have to resort to additional measures to get the ball rolling.