ECB rate decision to drive Euro

The European Central Bank (ECB) is scheduled to meet tomorrow to mull the region’s monetary policy. With the Euo/USD exchange rate relatively unchanged over the last couple months, investors will be closely eying the ECB for signals about the direction of European interest rates over the coming months. The consensus is that the Bank will leave rates unchanged at the current meeting, but commentators have been quick to point out that inflation is slowly inching up, which could precipitate future hikes. Either way, Jean Claude Trichet, the notoriously transparent president of the Central Bank, will likely give investors a very clear picture of where he expects European interest rates will move in the near-term. DailyFX reports:

CB President Jean-Claude has been eager in the past to correctly steer market expectations, so if there is a chance of further hikes beyond March, the central bank will not want markets to totally dismiss the possibility of further moves.

Read More: Euro Price Action Contingent on ECB Decision, Commentary by Trichet