ANZ analysts have identified five reasons why ECB governor Mario Draghi may not speak directly about the strength of the euro at Thursday's meeting:
- The euro is not overvalued and its rise is relatively moderate.
- The current strength of the euro reflects improved confidence in the outlook of the Euro-Zone economy and fading deflationary risks.
- The ECB is nearing the end of its stimulus program and has recently stopped its review of the possibility of lower interest rates.
- The average price of the EURUSD for the first eight months of this year was 1.1050 compared to the previous eight months of last year, which was 1.1160.
- ECB may try to weaken the exchange rate as it will soon provide details on the results of the current quantitative easing program, which may include details about a tapering program or possibly reduce asset purchases at the October meeting.